Ladenburg Thalmann Financial Services Inc. (LTS)

[investora2z]

The last one month has been great for the stock. It has moved up by nearly 13%, and the performance over one year has been even better. The last few days have seen higher volumes, and the stock has made its 52 week high recently. It is important for the stock to sustain above critical levels so that the breakout can be confirmed. Despite the appreciation, the valuations remain reasonable. It is trading at a price to sales ratio of 0.56. This is good for a company which has an operating profit margin of 4.5% on a ttm basis. Even the net margin is only slightly negative at -2.01%. So it is not far away from profitability, and the possibility of a turnaround is high. It has recorded revenues of $684 million on a ttm basis, and the net loss is $14 million. So the current year is expected to be better as compared to the last year when the company recorded revenues of $650 million. The net loss last year was $16 million. Improvement in the bottom-line requires the next couple of quarters to be good. Of course, the most important factor is the support of Dr. Phillip Frost. He is known for his vision at picking up companies with great potential when they are undervalued by the market. Many of his stocks have done great recently, with several delivering more than 100% return. His investment in Biozone Pharmaceuticals (BZNE) has made news recently, as that company owns the high potential QuSomes drug delivery technology. For Ladenburg, the upward momentum will be sustained in the long term only if it is supported by improved fundamental performance. The balance sheet of the company is strong as it has $50.82 million cash and the debt is $86.45 million. Next quarter results will be especially important.