Confused

25th May '15 by Rusty2

5 comments 13306 reads

Only been looking here recently. Struggling to find shares to invest in. Several that are well ranked don't seem that good companies to invest in? For instance the top ranked company is INDV with a ranking of 100. OK but I then look at the revenue and profits, which has been falling every year for last 2 years and is estimated to continue to fall, so I'm surprised this company is ranked so highly. There are a few others like this in the top 10 as well.

Unlock with Email

Unlock with Google

Already have an account?
Login here

About the Author

Rusty2

Premium Member

5 comments

WarrantStar

25th May '15

They plan to launch profitable new products. To get all the details it is necessary go onto the Indivior website and read their news flow.
Share prices take into account likely future events. With drug companies their pipeline of potential new products is a very important consideration.

Rusty2

25th May '15

Thanks. That would explain why the sp has gone up but its not reflected in the figures, sounds a bit risky to me.

mpat89

25th May '15

That's not really how the stock market works. Put in a really simple way: Share prices are based on the expected FUTURE cash flow, so a share price increase should never really be reflected in the figures!

matmat17

25th May '15

While Indivior plan to launch profitable new products (don't most companies?!) that is not the primary reason it ranks highly on the stockranks. In fact companies who share price is inflated based around the expectation of profitable new products in the future (jam tomorrow) tend to have lower Stockranks as the Stockrank ranking is compiled from its current position and short term forecasts.

Indivior is a relatively new stand alone company, having been spun off from Reckitt Benckiser late last year. To many investors Indivior looked cheap when it was spun off which can be seen in it's high value rank, if you look at the stock report you can see that Indivior has some low value metrics when compared to other pharmaceutical companies, PE ratio, PFC, EV/EBITDA etc..

Its share price has performed well since the spin off, and it has a good quality of earnings which you tend to see in good quality pharmaceutical companies so it is also has a high Quality and Momentum rank, giving it a high overall Stockrank.

It also comes with risks, revenue & profit are falling because its major products have come off patent and they are now having to compete with generic competitors which is attacking both its market share and margins.

Like always DYOR, personally I use stockranks to screen for companies which meet the criteria of companies I may be interested in investing in. I then research those companies that fit that criteria to see if they are the right fit for me.

Disclosure: I hold a long position in Indivior.

Rusty2

25th May '15

matmat17, many thanks for your information which does explain the ranking. I will give INDV a miss for now but will keep an eye on it.
Yes Im using Stockranks for screening but not finding much of interest at the moment. Headlam look the best so far.

Unlock the metrics for all these stocks and more...

Take a free trial

Facebook Twitter Youtube Instagram RSS

This site cannot substitute for professional investment advice or independent factual verification. To use it, you must accept our Terms of Use, Privacy and Disclaimer policies.

Unlock the metrics for all these stocks and more...

Take a free trial

Confused

Unlock the rest of this article with a 14 day trial

About the Author

Rusty2

5 comments

Unlock the metrics for all these stocks and more...

Unlock the metrics for all these stocks and more...