By Peet Serfontein & Hashmeel Suka.
Lantheus Holdings develops, manufactures, sells, and distributes diagnostic medical imaging agents and products that assist clinicians in the diagnosis of cancers, cardiovascular issues, and other diseases. The company serves a diverse range of customers worldwide.
Fundamental performance over the past five years has been quite strong, with adjusted EPS and revenue increasing 41% and 30%, respectively (on a compounded-annual basis). Growth during FY22 was particularly strong following the launch of PYLARIFY, which at the time was the world's first and only commercially available PSMA PET imaging agent (for prostate cancer). This introduced a strong sales pipeline to diversify the group's portfolio while boosting profit.
The stock price has formed an upward sloping megaphone pattern (refer to the first chart), which is a compelling technical indicator. Also known as a “broadening formation”, this pattern is characterised by successively higher highs and lower lows as the stock price moves within an expanding range, suggesting contrasting views in the market. This divergence creates higher volatility, which in turn attracts more investor interest. Often, this interest causes a break toward the upside.
The stock is trading below its 200-day simple moving average of ~$71.20, making this a contrarian trade.
Emerging upside momentum, according to the MACD indicator as well as steep upwards movement of the on-balance volume indicator, supports our bullish view.
Share Information
| Share Code | LNTH US |
|---|---|
| Industry | Health Care Equipment & Services |
| Market Capital (USD) | 4.48 billion |
| One Year Total Return | -10.54% |
| Return Year-to-Date | 5.45% |
| Current Price (USD) | 65.38 |
| 52 Week High (USD) | 100.85 |
| 52 Week Low (USD) | 50.20 |
| Financial Year End | December |
| The stock price has come under pressure over the past twelve months, though various technical indicators suggest a recovery going forward. |
Consensus expectations
(Bloomberg)
| FY23 | FY24E | FY25E | FY26E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 6.23 | 6.57 | 6.67 | 7.60 |
| Growth (%) | 5.46 | 1.49 | 14.04 | |
| Dividend Per Share (USD) | - | - | - | - |
| Growth (%) | - | - | - | |
| Forward PE (times) | 9.93 | 9.59 | 8.60 | |
| Forward Dividend Yield (%) | - | - | - | |
| The market expects decent growth from top-to-bottom over the medium-term. | ||||
Buy/Sell Rationale
Technical Analysis:
Long-term fundamental view:
| Share Name and position | CARZ - Buy (Continue to hold) |
KMX - Buy (Continue to hold) |
CVX - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 53.61 | 73.30 | 147.89 |
| Current | 57.82 | 79.00 | 152.01 |
| Movement | 7.9% | 7.8% | 2.8% |
|
An incomplete symmetrical triangle pattern remains of interest. The ETF remains above its 200-day moving average. Upside price momentum remains supportive.
Our profit target remains at $60, with a trailing stop-loss at $55.70. Exit the trade around 22 May 2024. |
A price in a smaller inclining channel pattern remains of interest. The stock crossed above its 200-day moving average. Upside price momentum is supportive.
Our profit target is $86, with a trailing stop-loss of $73.70. Exit the position around 12 April 2024. |
The stock price is holding above key support, and this remains attractive. Upside price momentum has halted, which is a concern.
Our profit target is $167, with a stop-loss of $145.30 Exit the position around 28 June 2024. |
| Share Name and position | HSIC - Buy (Continue to hold) |
DAY - Buy (Continue to hold) |
BRY - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 76.09 | 69.45 | 7.12 |
| Current | 76.47 | 69.76 | 7.05 |
| Movement | 0.5% | 0.4% | -1.3% |
|
The emergence of a falling wedge pattern remains of interest. The stock remains above 200-day moving average. Upside price momentum halted again, which is a concern.
Our profit target is $85, with a trailing stop-loss of $73.70. Exit the position around 5 June 2024. |
Note: Ceridian (CDAY) changed its name as well as its ticker to Dayforce (DAY) on 1 February 2024.
The stock is challenging the upper limit of an emerging symmetrical triangle pattern. The stock remains above its 200-day moving average. Upside price momentum has halted, which is a concern. Our profit target is $80, with a trailing stop-loss of $65.70. Exit the position around 8 May 2024. |
The formation of a falling wedge pattern remains attractive. The stock remains below its 200-day moving average and we maintain a counter-trend strategy. Emerging upside momentum is supportive.
Our profit target remains at $8.50, with a trailing stop-loss at $6.65. Exit the trade by 5 June 2024. |
