Financial Analysis: Salix Pharmaceuticals (SLXP) vs. Advanced Accelerator Application (AAAP)

Salix Pharmaceuticals (NASDAQ: SLXP) and Advanced Accelerator Application (NASDAQ:AAAP) are both mid-cap specialty & advanced pharmaceuticals companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Profitability

This table compares Salix Pharmaceuticals and Advanced Accelerator Application’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Salix Pharmaceuticals -2,134.34% -305.24% -25.83%
Advanced Accelerator Application -43.93% -20.59% -14.58%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Salix Pharmaceuticals and Advanced Accelerator Application, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Salix Pharmaceuticals 0 0 0 0 N/A
Advanced Accelerator Application 0 2 2 0 2.50

Advanced Accelerator Application has a consensus target price of $64.50, indicating a potential downside of 21.34%. Given Advanced Accelerator Application’s higher possible upside, analysts plainly believe Advanced Accelerator Application is more favorable than Salix Pharmaceuticals.

Risk & Volatility

Salix Pharmaceuticals has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, Advanced Accelerator Application has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.

Institutional & Insider Ownership

39.2% of Advanced Accelerator Application shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Salix Pharmaceuticals and Advanced Accelerator Application’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Salix Pharmaceuticals N/A N/A N/A ($6.51) -26.55
Advanced Accelerator Application $121.01 million 29.80 -$27.99 million ($1.31) -62.60

Salix Pharmaceuticals has higher earnings, but lower revenue than Advanced Accelerator Application. Advanced Accelerator Application is trading at a lower price-to-earnings ratio than Salix Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.

Summary

Advanced Accelerator Application beats Salix Pharmaceuticals on 9 of the 10 factors compared between the two stocks.

Salix Pharmaceuticals Company Profile

Salix Pharmaceuticals, Ltd. is a specialty pharmaceutical company engaged in acquiring, developing and commercializing prescription drugs and medical devices used in the treatment of a variety of gastrointestinal disorders. The Company offers over 20 marketed products, such as XIFAXAN550 (rifaximin) tablets, XIFAXAN (rifaximin) tablets, APRISO (mesalamine) extended-release capsules, UCERIS (budesonide MMX) extended release tablets, MOVIPREP, GLUMETZA extended release tablets, RELISTOR subcutaneous injection, UCERIS rectal foam, OSMOPREP tablets, SOLESTA, DEFLUX, FULYZAQ (crofelemer) delayed-release tablets, GIAZO (balsalazide disodium) tablets, CYCLOSET (bromocriptine mesylate) tablets, and FENOGLIDE (fenofibrate) tablets, among others. Its primary product candidates under development include Rifaximin, Methylnaltrexone bromide oral, Ruconest, Rifaximin delayed release or extended intestinal release and Rifaximin soluble solid dispersion (SSD)/next generation.

Advanced Accelerator Application Company Profile

Advanced Accelerator Applications S.A. is a radiopharmaceutical company. The Company develops, produces and commercializes molecular nuclear medicine (MNM), diagnostic and therapeutic products. MNM uses trace amounts of radioactive compounds to create functional images of organs and lesions and to treat diseases, such as cancer. The Company has a portfolio of nine diagnostic positron emission tomography (PET) and single-photon emission computed tomography (SPECT) products. PET and SPECT are imaging techniques in molecular nuclear diagnostics (MND) with applications in clinical oncology, cardiology, neurology and inflammatory/infectious diseases. Its commercial products include Gluscan/Gluscan 500/Barnascan, FluoroChol, MIBITEC/Adamibi, DOPAVIEW, Leukokit, Neurolite, SomaKit and NETSPOT. Additional MND product candidates include Annexin V-128, a SPECT product candidate for the imaging of apoptotic and necrotic lesions with potential applications in a range of indications.

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