Endo International (ENDP) has been on a tear as of late. The stock is up about 150% since late May when I wrote a key drug from its pipeline could make ENDP a four-bagger. Those who follow Shocking The Street know we are not keen on stocks, but when we go long then it must be serious. Endo’s Q2 results confirmed the company had the potential to stabilize EBITDA margins long enough for its boat to come in:
It is still difficult to determine just what Endo is. Is it a generic drug maker like Teva (TEVA) and Mylan (MYL) or is it something else? U.S. generics still represents the company’s largest revenue segment at 34% of total revenue, down from 44% in the year earlier period. Generic drug makers are losing pricing power, particularly in North America where Endo operates. Large buyers are demanding lower prices. The dismal results also reflect the loss of exclusivity for ezetimibe and the discontinuation of metoprolol.
Ken Griffin’s Citadel LLC, which has $24 billion in asset under management, recently captured investors’ attention for sizeable positions in Aaron’s (AAN), Advance Auto Parts (AAP), and Michael Kores (KORS).
It got less coverage for its huge bet on ENDP. Sources show Citadel had about 2.1 million shares, triple its previous state in ENDP. According to Shocking The Street the “smart money” could help sentiment for ENDP. Read more: