Amphastar Pharmaceuticals is in a buy zone again after the biotech stock staged a massive 2023 rally. So AMPH stock is Wednesday's pick for IBD 50 Stocks To Watch.
According to the IBD MarketSmith pattern recognition tool, AMPH stock sits just above an entry at 58.35 out of a cup with handle. Shares are nearing their all-time high of 67.66 after nearly doubling in price from their year-end close last December. Meanwhile, the S&P 500 has gained 23% by comparison.
The biotech stock also has top-notch technical ratings, with best-possible scores of 99 in Composite Rating and EPS Rating. Its Relative Strength Rating is not far off at 95.
Further, AMPH stock ranks first in the biomed/biotech group. The group ranks a strong 31st among IBD's 197 industry groups.
AMPH Stock: Growth In Diabetes Drug
Amphastar makes drugs that can be injected or inhaled. Third-quarter sales rose 50% to $180.6 million while earnings of $1.15 a share vaulted 203% from the prior year, the company said in its Nov. 8 report. Sales from its generic diabetes drug Glucagon drove growth, as they more than doubled from the year-ago quarter, Amphastar said.
The biotech firm also completed its purchase of Baqsimi from Eli Lilly in June. The emergency diabetes drug is used to treat patients with acute cases of low blood sugar.
Amphastar did not report full revenue from Baqsimi during the quarter since it is still under a transition agreement that allows Eli Lilly to record sales of the drug for now. Once the transition is complete, Amphastar is expected to record Baqsimi sales.
Chief Executive Jack Zhang notes the company has a pipeline of other drugs.
"As we move forward, we anticipate that our strong pipeline will continue to drive growth in the future," Zhang said in the company's earnings release.
Rallying Off Results Of Biotech Stock
The company's third-quarter results sparked a rally in early November. Shares rebounded from their 50-day moving average in strong volume before forming a handle off its cup base.
Big money has been paying some attention to the biotech stock as well. Mutual funds have been net buyers of AMPH stock over the past two quarters.
Funds own 68% of outstanding shares, giving the biotech stock an Accumulation/Distribution Rating of B-. One is the Federated Hermes Kaufmann Small Cap Fund.
Exchange traded funds hold Amphastar as well. The iShares S&P Small Cap 600 Growth ETF and the Invesco Pharmaceutical ETF are some of the investors in AMPH stock.
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