Stock Analysis: Decent Value Stocks

Fundamental Rating

We assign a fundamental rating of 8 out of 10 to HALO. HALO was compared to 563 industry peers in the Biotechnology industry. Both the health and profitability get an excellent rating, making HALO a very profitable company, without any liquidiy or solvency issues. An interesting combination arises when we look at growth and value: HALO is growing strongly while it also seems undervalued. These ratings would make HALO suitable for value and growth and quality investing!

1. Profitability

1.1 Basic Checks

HALO had positive earnings in the past year.

In the past year HALO had a positive cash flow from operations.

Each year in the past 5 years HALO has been profitable.

In the past 5 years HALO always reported a positive cash flow from operatings.

1.2 Ratios

HALO's Return On Assets of 22.10% is amongst the best of the industry. HALO outperforms 98.94% of its industry peers.

HALO's Return On Equity of 100.64% is amongst the best of the industry. HALO outperforms 99.47% of its industry peers.

HALO's Return On Invested Capital of 23.44% is amongst the best of the industry. HALO outperforms 98.94% of its industry peers.

Measured over the past 3 years, the Average Return On Invested Capital for HALO is above the industry average of 14.28%.

The last Return On Invested Capital (23.44%) for HALO is above the 3 year average (17.81%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	22.1%
ROE	100.64%
ROIC	23.44%

ROA(3y)16.25%

ROA(5y)21.49%

ROE(3y)192.36%

ROE(5y)173.4%

ROIC(3y)17.81%

ROIC(5y)29.79%

1.3 Margins

HALO's Profit Margin of 44.76% is amongst the best of the industry. HALO outperforms 98.94% of its industry peers.

In the last couple of years the Profit Margin of HALO has declined.

Looking at the Operating Margin, with a value of 55.10%, HALO belongs to the top of the industry, outperforming 99.82% of the companies in the same industry.

HALO's Operating Margin has declined in the last couple of years.

With an excellent Gross Margin value of 83.45%, HALO belongs to the best of the industry, outperforming 86.17% of the companies in the same industry.

In the last couple of years the Gross Margin of HALO has grown nicely.

		Industry Rank	Sector Rank
OM	55.1%
PM (TTM)	44.76%
GM	83.45%

OM growth 3Y-4.44%

OM growth 5YN/A

PM growth 3Y-21.62%

PM growth 5YN/A

GM growth 3Y1.07%

GM growth 5Y1.9%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

HALO has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.

Compared to 1 year ago, HALO has less shares outstanding

Compared to 5 years ago, HALO has less shares outstanding

Compared to 1 year ago, HALO has an improved debt to assets ratio.

2.2 Solvency

HALO has an Altman-Z score of 5.15. This indicates that HALO is financially healthy and has little risk of bankruptcy at the moment.

The Altman-Z score of HALO (5.15) is better than 81.03% of its industry peers.

The Debt to FCF ratio of HALO is 3.04, which is a good value as it means it would take HALO, 3.04 years of fcf income to pay off all of its debts.

HALO has a better Debt to FCF ratio (3.04) than 93.97% of its industry peers.

A Debt/Equity ratio of 3.13 is on the high side and indicates that HALO has dependencies on debt financing.

HALO has a worse Debt to Equity ratio (3.13) than 82.98% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	3.13
Debt/FCF	3.04
Altman-Z	5.15

ROIC/WACC2.51

WACC9.33%

2.3 Liquidity

A Current Ratio of 8.39 indicates that HALO has no problem at all paying its short term obligations.

HALO has a better Current ratio (8.39) than 74.65% of its industry peers.

A Quick Ratio of 7.30 indicates that HALO has no problem at all paying its short term obligations.

The Quick ratio of HALO (7.30) is better than 69.86% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	8.39
Quick Ratio	7.3

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 46.77% over the past year.

HALO shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 30.12% yearly.

The Revenue has grown by 25.66% in the past year. This is a very strong growth!

Measured over the past years, HALO shows a very strong growth in Revenue. The Revenue has been growing by 38.95% on average per year.

EPS 1Y (TTM)46.77%

EPS 3Y30.12%

EPS 5YN/A

EPS Q2Q%40.51%

Revenue 1Y (TTM)25.66%

Revenue growth 3Y31.82%

Revenue growth 5Y38.95%

Sales Q2Q%35.22%

3.2 Future

HALO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.06% yearly.

Based on estimates for the next years, HALO will show a quite strong growth in Revenue. The Revenue will grow by 11.27% on average per year.

EPS Next Y24.79%

EPS Next 2Y26.9%

EPS Next 3Y24.66%

EPS Next 5Y16.06%

Revenue Next Year23.85%

Revenue Next 2Y23.25%

Revenue Next 3Y21.17%

Revenue Next 5Y11.27%

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 14.48, which indicates a correct valuation of HALO.

95.92% of the companies in the same industry are more expensive than HALO, based on the Price/Earnings ratio.

The average S&P500 Price/Earnings ratio is at 24.21. HALO is valued slightly cheaper when compared to this.

HALO is valuated reasonably with a Price/Forward Earnings ratio of 9.67.

HALO's Price/Forward Earnings ratio is rather cheap when compared to the industry. HALO is cheaper than 96.99% of the companies in the same industry.

When comparing the Price/Forward Earnings ratio of HALO to the average of the S&P500 Index (20.44), we can say HALO is valued rather cheaply.

		Industry Rank	Sector Rank
PE	14.48
Fwd PE	9.67

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, HALO is valued cheaply inside the industry as 96.28% of the companies are valued more expensively.

96.10% of the companies in the same industry are more expensive than HALO, based on the Price/Free Cash Flow ratio.