5-Star Stocks Poised to Pop: KV Pharmaceutical

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Based on the aggregated intelligence of 140,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, small-cap drugmaker KV Pharmaceutical (NYSE: KV-A) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at KV's business and see what CAPS investors are saying about the stock right now.

KV facts

Headquarters (Founded)

Bridgeton, Mo. (1942)

Market Cap

$163.7 million

Industry

Pharmaceuticals

Trailing-12-Month Revenue

$636.4 million

Management

Interim CEO David Van Vliet (since December 2008)

Interim CFO Thomas McHugh (since September 2009)

Compound Annual Revenue and Net Income Growth (Over Past 5 Years)

20.1% and 25.9%

Cash / Debt

$135.1 million / $269 million

Competitors

AstraZeneca (NYSE: AZN)

Celgene (Nasdaq: CELG)

Novartis (NYSE: NVS)

CAPS Members Bullish on KV-A Also Bullish on

Johnson & Johnson (NYSE: JNJ)

General Electric (NYSE: GE)

CAPS Members Bearish on KV-A Also Bearish on

Hovnanian Enterprises (NYSE: HOV)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 97% of the 254 members who have rated KV believe the stock will outperform the S&P 500 going forward. These bulls include pablogrimes and "All-Star" pick compiler AllStarPortfolio, which is ranked in the top 10% of our community.

Late last month, pablogrimes tapped KV as a cheap way to buy into healthy trends: "A beaten-down stock price for a company that has weathered the storm. I see it as a bargain-basement price to expose my portfolio to the one portion of health care industry that's not under debate -- drug production & delivery."

In a pitch from last month, AllStarPortfolio (using a pick and pitch from ChrisGraley) noted that KV is steadily recovering from its recent issues. Here's an excerpt:

In March 2009, the company agreed to an injunction from the FDA to stop manufacturing and shipping all drugs until they receive approval from the FDA on good manufacturing practices. ... All that being said, this company has turned the corner. You've seen the previous growth rate ... They also have some drugs that were delayed in the FDA pipeline that are now being considered as well. They should see a surge in growth as these drugs get approved. They got caught doing what most drug companies have been doing to a lesser extent, at a time that the FDA wanted to prove a point that they were cracking down. They will now have the best manufacturing processes for the next 5 years.

What do you think about KV, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. The CAPS community is waiting to hear your opinions. CAPS is 100% free, so get started!

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Novartis is a Motley Fool Global Gains pick, and Johnson & Johnson is a choice of Income Investor. The Fool's disclosure policy always gets a perfect score.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 14, 2009, at 10:29 AM, singlady wrote:

    I try to do a quick symbol search on e-trade how come it is not returning any results? KV/A, KV/B or KV-A & KV-B has no success. Anyone know why?

  • Report this Comment On October 14, 2009, at 10:48 AM, threesplenti wrote:

    Try KV/a or kva. That works on NYSE.com.

  • Report this Comment On October 14, 2009, at 10:52 AM, singlady wrote:

    no both didnt work either, really strange.

  • Report this Comment On October 14, 2009, at 11:32 AM, MDGiz wrote:

    Hey singlady, I trade with TDameritrade..Try KV.A, the period works for me! Good luck with it if you buy it.

  • Report this Comment On October 14, 2009, at 12:00 PM, RichieRichMo wrote:

    KVA or KVB

  • Report this Comment On October 14, 2009, at 12:05 PM, Sozurmama wrote:

    kv-a

  • Report this Comment On October 14, 2009, at 12:16 PM, peterod wrote:

    kv.a

  • Report this Comment On October 14, 2009, at 12:16 PM, singlady wrote:

    kv.a worked! Thanks MDGiz

  • Report this Comment On October 14, 2009, at 11:10 PM, PaulNolasco wrote:

    I've been buying this stock since they were at 0.60!! I'm making a killing on this one.

  • Report this Comment On October 16, 2009, at 11:45 AM, LatifK wrote:

    I backed the truck up on this one at $3.8

    Late to the party, but not out.

    Will buy more on any dips below $4.

  • Report this Comment On November 12, 2009, at 1:37 PM, stockresearcher6 wrote:

    In reading through the research this firm has some real troubles ahead of it. Alot more than the stock price warrants which is why it has been declining. There is an interim CEO, they have multiple and aggregious production issues such that they closed all essential production for most of 2009 and will not e producing for cash flow any time soon. They have not reported financial results all year and in the SEC documents are preparing thier stockholders by stating that tey are not sure if they will be a "going concern" moving forward. Not being a going concern means becoming insolvent and shutting the doors permanently. By the way, it is a legal requirement for firms to file this way if tey have an inkling they might not make it out intact. This is due to lack of income for many months, recalls and no production for sale until well into next year, if ever. Get on the train if you wish, but I went ahead and cut my losses. It seemed real good on the surface until you read the FDA and SEC documents. Maybe someone has insider knowledge which makes this a five star...but it really is not worth the value of the equipment...which sounds like it was overused and undermaintaned in the first place according to the FDA. Which, by the way...is probably why they made such good profits for a number of years.

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DocumentId: 1006733, ~/Articles/ArticleHandler.aspx, 12/3/2009 10:04:15 AM

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