Through The Fly's Eyes: PAREXEL
from contributing editor Larry Shutts, Vice-President of Stockwinners.com
PAREXEL smooths the medical development path
In the medical products world, it's a long trip from concept to commercialization. Firms making the journey can sometimes lose sight of the trail. When they do, though, they know there is an experienced guide in Waltham, Massachusetts.
PAREXEL International Corporation (PRXL) provides contract research, medical marketing, and consulting services to the pharmaceutical, biotechnology, and medical device industries. Its Clinical Research Services segment offers clinical trial and data management, clinical pharmacology and related medical advisory services. The Consulting and Marketing Services unit offers technical advice in new product development, marketing and regulatory affairs. Subsidiary Perceptive Informatics sells IT systems and services that help manage clinical trials.
The company pleased investors a week ago, when it reported fiscal Q2 earnings per share (EPS) of 32 cents and revenues of $180.5 million.
Analysts were looking for 28 cents and $177.2 million. Management also guided Q3 EPS to 31-34 cents (32 cent consensus), Q3 revenues to $185-$190 million ($185.89M consensus), FY07 EPS to $1.22-$1.28 ($1.20 consensus) and FY07 revenues to $722-$737 million ($723.29M consensus). The news boosted the shares past 50-day moving average resistance into a bullish "pennant" consolidation pattern. Stocks frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Brokers recommend the issue with two "strong buys", two "buys", five "holds" and a "sell". Analysts see a 26 percent growth rate, through the next year. The PRXL price to sales ratio (1.08), price to cash flow ratio (15.42), sales growth rate (20.49%) and earnings per share growth rate (68.42%) compare favorably with industry, sector and S&P 500 averages.
The stock is one of those used to calculate the S&P 600 SmallCap Index. Institutional investors hold about 94% of the outstanding shares. Over the past fifty-two weeks, PRXL has traded between $22.90 and $37.68. An interested investor in this stock might consider stop-loss of $29.40 when investing in this stock. Note that the firm is scheduled to present today, at the Wachovia Small and Mid-Cap Healthcare Conference (2:30 pm ET).