For Immediate Release
Chicago, IL – August 12, 2013 – Zacks Equity Research highlights Hovnanian Enterprises, Inc. (HOV-Free Report) as the Bull of the Day and Potash Corporation of Saskatchewan (POT Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Supernus Pharmaceuticals, Inc. (SUPN-Free Report), Actavis, Inc. (ACT-Free Report) and Anika Therapeutics Inc. (ANIK-Free Report).
Here is a synopsis of all five stocks:
Housing stocks have fallen from their recent highs. Yet builders like Hovnanian Enterprises, Inc. (HOV-Free Report) are still expected to generate double digit earnings growth this year and in 2014. Is this stock weakness a buying opportunity?
Hovnanian and its brands, which include Brighton Homes, Parkwood Builders, Town & Country Homes and Oster Homes, is one of the most recognizable homebuilders in the United States. Founded in 1959, it has operations in 16 states, including the hot housing markets of California, Florida, Illinois, Arizona and Virginia, and the District of Columbia.
Hovnanian reports earnings outside of the normal earnings cycle. It reported second quarter earnings results all the way back on June 5. But it was a sign of things to come with the rest of the homebuilders as it easily beat the Zacks Consensus by 120%.
The company made a penny, beating the Zacks Consensus by 6 cents. The Zacks Consensus was looking for a loss of 5 cents.
Revenue was up 23.8% to $423 million. For the first six months of fiscal 2013, revenue rose 27.8% to $781.2 million.
Hovnanian was able to raise home prices in the quarter throughout the country to offset increases in labor or material costs. Homebuilding gross margin percentage increased 150 basis points to 18.9% from 17.4% in the second quarter of fiscal 2012.
The fertilizer industry was blindsided on July 30 when Russian potash giant Uralkali announced it was leaving the lucrative potash cartel. Shares of Potash Corporation of Saskatchewan (POT Free Report), the world's largest potash producer, got hit and earnings estimates were slashed. Earnings are now expected to decline by 14% in 2013.
Russian-based Uralkali's announcement, that it would operate its plants at nearly 100% capacity, thereby flooding the fertilizer market with potash, caught everyone by surprise. Uralkali is part of a cartel of companies which includes Belarus-based Belaruskali and the Canadian producers, Potash, Mosaic and Agrium, which regulates the inventory of potash on the market.
Analysts expect the price of potash to plunge as a result. Potash price per ton averaged $485 in 2012. Analysts expect it to fall as low as $300 per ton. Of course, this will go directly to the bottom line.
Supernus Files Suit Against Actavis
Supernus Pharmaceuticals, Inc. (SUPN-Free Report) recently announced the filing of a patent infringement lawsuit against Actavis, Inc. (ACT-Free Report). Actavis is looking to launch its generic version of Oxtellar XR – an antiepileptic drug.
With the patent infringement lawsuit being filed in the U.S. District Court for the District of New Jersey within 45 days of the receipt of the paragraph IV certification notice, the U.S. Food and Drug Administration (:FDA) cannot grant final approval to the generic versions of Oxtellar XR before 30 months.
The challenged patents are scheduled to expire on Apr 13, 2027.
Oxtellar XR is an extended release formulation of oxcarbazepine. Oxtellar XR is an antiepileptic drug indicated for adjunctive therapy for the treatment of partial seizures in adults and in children 6 to 17 years of age.
Oxtellar XR is the sole marketed product in Supernus' portfolio, which was launched in Feb 2013 in the U.S. In Nov 2012, Supernus had received three years of marketing exclusivity from the FDA. As of Mar 31, 2013, net deferred product revenue was $3.6 million. In the first two months of its launch, prescriptions totaled 579.
Supernus has an agreement with Patheon Inc. for the manufacture, formulation, development and supply of commercial-grade quantities of oxcarbazepine, the active pharmaceutical ingredient in Supernus’ Oxtellar XR, in the U.S. As per the terms of the commercial supply agreement, Patheon will manufacture (including processing, packaging and labeling) oxcarbazepine at its facility. Supernus will provide Patheon with all relevant materials required for manufacturing the product.
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