Could Lantheus Stock’s Cash Flow Spark the Next Rally?
Here is why we think Lantheus (LNTH) stock is worth a look: It is growing, producing cash, and available at a significant valuation discount. Let’s see the numbers.
- Cash Yield: Lantheus offers an impressive cash flow yield of 12.2%.
- Growing: Last 12 month revenue growth of 5.7% means that the cash pile is going to grow.
- Valuation Discount: LNTH stock is currently trading at 39% below 3-month high, 56% below 1-year high, and 59% below 2-year high.
Free Cash Flow Yield refers to free cash flow per share / stock price. Why it matters? If a company produces high amount of cash per share, it can be used to fuel additional revenue growth, or simply paid through dividends or buybacks to shareholders. For quick background, Lantheus provides diagnostic and therapeutic products, including ultrasound agents and radiotherapeutics, to assist in diagnosing and treating heart disease, cancer, and other conditions.
Single stock can be risky, but there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Separately, consider what could long-term performance for your portfolio be if you combined 10% commodities, 10% gold, and 2% crypto with equities.
| LNTH | S&P Median | |
|---|---|---|
| Sector | Health Care | – |
| Industry | Health Care Supplies | – |
| Free Cash Flow Yield | 12.2% | 3.9% |
| Revenue Growth LTM | 5.7% | 5.2% |
| Operating Margin LTM | 28.9% | 18.6% |
| PS Ratio | 2.5 | 3.3 |
| PE Ratio | 14.3 | 24.0 |
| Discount vs 3-Month High | -38.8% | -5.0% |
| Discount vs 1-Year High | -56.0% | -9.7% |
| Discount vs 2-Year High | -58.5% | -11.4% |
But do these numbers tell the full story? Read Buy or Sell LNTH Stock to see if Lantheus still has an edge that holds up under the hood.
The Point? The Market Can Notice, And Reward
The below statistics are from “high FCF yield at with growth and discount” selection strategy since 12/31/2016. The stats are calculated based on selections made monthly, and assuming that a stock once picked, can not be re-picked for next 180 days.
- Average 6-month and 12-month forward returns of 25.7% and 57.9% respectively
- Win rate (percentage of picks returning positive) of > 70% for both 6-month and 12-month periods
But Consider The Risk
That said, LNTH isn’t immune to sharp declines. It fell about 48% during the 2018 correction, 56% in the Covid pandemic sell-off, and nearly 45% through the inflation shock. Even with its strengths, LNTH can take big hits when the market turns. Solid fundamentals matter, but steep drops still happen.
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read LNTH Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
Picking winners on a consistent basis is not an easy task – especially given the volatility associated with a single stock. Instead, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.