Why Acura Is Poised to Pull Back
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, specialty drug company Acura Pharmaceuticals has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Acura and see what CAPS investors are saying about the stock right now.
Acura facts
Headquarters (founded) | Palatine, Ill. (1935) |
Market Cap | $140 million |
Industry | Pharmaceuticals |
Trailing-12-Month EBITDA | ($8.4 million) |
Management | CEO Robert Jones (since 2011) |
Return on Equity (average, past 3 years) | (14.6%) |
Cash/Debt | $29.3 million / $0 |
Competitors | Collegium Pharmaceutical |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 36% of the 97 members who have rated Acura believe the stock will underperform the S&P 500 going forward.
Just yesterday, one of those Fools, All-Star zzlangerhans, tapped the stock's recent surge as particularly unsustainable:
When is a non-catalyst a catalyst? ... There was never any doubt that Acura would be putting Nexafed on drugstore shelves, the issue has always been whether they will turn anything resembling a profit. The announcement [Monday] today changes absolutely nothing. OTC cold medicines are a pretty low margin business, and I suspect it takes having a hefty number of them to overcome the costs of doing business in the space. ... Nexafed will be priced similarly to branded pseudoephedrine, which means at the top of the tier, and provides no incentive for a buyer over generic pseudoephedrine.
Acura seems to attract a lot of pyramid-minded traders, who love to pile on once the stock gets some upward momentum because there are a lot of greater fools out there. Will they be the same greater fools who rode the share price back down from [$2.50] to [$1.40] after last month's irrational spike?
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The article Why Acura Is Poised to Pull Back originally appeared on Fool.com.
Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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