Why Acura Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, specialty drug company Acura Pharmaceuticals (NASDAQ: ACUR  ) has received the dreaded one-star ranking.

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

Acura facts

Headquarters (founded)

Palatine, Ill. (1935)

Market Cap

$140 million

Industry

Pharmaceuticals

Trailing-12-Month EBITDA

($8.4 million)

Management

CEO Robert Jones (since 2011)
CFO Peter Clemens (since 1998)

Return on Equity (average, past 3 years)

(14.6%)

Cash/Debt

$29.3 million / $0

Competitors

Collegium Pharmaceutical
Pain Therapeutics (NASDAQ: PTIE  ) Purdue Pharma

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 36% of the 97 members who have rated Acura believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star zzlangerhans, tapped the stock's recent surge as particularly unsustainable:

When is a non-catalyst a catalyst? ... There was never any doubt that Acura would be putting Nexafed on drugstore shelves, the issue has always been whether they will turn anything resembling a profit. The announcement [Monday] today changes absolutely nothing. OTC cold medicines are a pretty low margin business, and I suspect it takes having a hefty number of them to overcome the costs of doing business in the space. ... Nexafed will be priced similarly to branded pseudoephedrine, which means at the top of the tier, and provides no incentive for a buyer over generic pseudoephedrine.

Acura seems to attract a lot of pyramid-minded traders, who love to pile on once the stock gets some upward momentum because there are a lot of greater fools out there. Will they be the same greater fools who rode the share price back down from [$2.50] to [$1.40] after last month's irrational spike?

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Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

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  • Report this Comment On January 14, 2013, at 1:16 PM, naughtyguy wrote:

    I have already read of communities pulling pseudoephedrin products off their shelves in their attempt to reduce meth labs. This company has the only product that will ultimately be left on the shelves as the awareness increases about it's anti-abusive formula. Your article totally missed the point of this company's strategies. With plenty of cash and no debt, this company should have a bright future. I don't own any position in this stock, but am considering it for future purchase.

    I don't know why a major drug company hasn't snatched it up yet.

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