Heron Therapeutics (NASDAQ: HRTX) and Hutchison China MediTech (NASDAQ:HCM) are both mid-cap medical companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitability and dividends.
Earnings and Valuation
This table compares Heron Therapeutics and Hutchison China MediTech’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Heron Therapeutics||$30.77 million||70.22||-$197.48 million||$3.65||8.38|
|Hutchison China MediTech||$241.20 million||17.64||-$26.73 million||($0.22)||-145.45|
This table compares Heron Therapeutics and Hutchison China MediTech’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hutchison China MediTech||N/A||N/A||N/A|
Risk and Volatility
Heron Therapeutics has a beta of 1.86, suggesting that its stock price is 86% more volatile than the S&P 500. Comparatively, Hutchison China MediTech has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500.
Institutional & Insider Ownership
97.4% of Heron Therapeutics shares are held by institutional investors. Comparatively, 7.5% of Hutchison China MediTech shares are held by institutional investors. 19.9% of Heron Therapeutics shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This is a summary of recent ratings and price targets for Heron Therapeutics and Hutchison China MediTech, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hutchison China MediTech||0||0||1||0||3.00|
Heron Therapeutics currently has a consensus target price of $37.42, suggesting a potential upside of 22.28%. Hutchison China MediTech has a consensus target price of $38.00, suggesting a potential upside of 18.75%. Given Heron Therapeutics’ higher probable upside, equities analysts clearly believe Heron Therapeutics is more favorable than Hutchison China MediTech.
Heron Therapeutics beats Hutchison China MediTech on 7 of the 12 factors compared between the two stocks.
About Heron Therapeutics
Heron Therapeutics, Inc., a biotechnology company, engages in developing medicines to address unmet medical needs. The company's product candidates utilize its proprietary Biochronomer drug delivery technology, which delivers therapeutic levels of a range of short-acting pharmacological agents over a period from days to weeks with a single administration. It offers SUSTOL (granisetron) extended-release injection for the prevention of acute and delayed chemotherapy-induced nausea and vomiting (CINV) associated with moderately emetogenic chemotherapy, or anthracycline and cyclophosphamide combination chemotherapy regimens. The company is also developing CINVANTI, a neurokinin-1 receptor antagonist aprepitant for the prevention of CINV; and HTX-011, which is in Phase III clinical development for the prevention of post-operative pain. The company was formerly known as A.P. Pharma, Inc. and changed its name to Heron Therapeutics, Inc. in January 2014. Heron Therapeutics, Inc. was founded in 1983 and is headquartered in San Diego, California.
About Hutchison China MediTech
Hutchison China MediTech Limited, a biopharmaceutical company, engages in the research, development, manufacture, and sale of pharmaceuticals and healthcare products primarily in the People's Republic of China and Hong Kong. It operates through Innovation Platform and Commercial Platform segments. The company discovers and develops therapeutics in oncology and autoimmune diseases, as well as provides research and development services; and develops, manufactures, distributes, markets, and sells prescription and over-the-counter pharmaceutical products, and consumer health products under the Baiyunshan and Shang Yao brands. Its clinical drug candidates include Savolitinib, an inhibitor for treating non-small cell lung, colorectal, and gastric cancer, as well as papillary renal cell carcinoma; Fruquintinib, an oral inhibitor for the treatment of colorectal, non-small cell lung, and gastric cancer; Sulfatinib for treating neuroendocrine tumors, and thyroid and biliary tract cancer; and Epitinib for the treatment of non-small cell lung cancer, as well as for patients with glioblastoma. The company also develops Theliatinib epidermal growth factor receptor inhibitor for treating solid tumors, as well as for patients with esophageal cancer; HMPL-523, an oral inhibitor for the treatment of immunology, rheumatoid arthritis, and hematological cancers; HMPL-689, a small molecule inhibitor for the treatment of hematologic cancers, autoimmunity and transplant organ rejection, and other related inflammation diseases; HMPL-453, a small molecule inhibitor for the treatment of solid tumors; and HMPL-004 for the treatment of ulcerative colitis and Crohn's disease. It has strategic alliances with AstraZeneca AB (publ); Eli Lilly and Company; and Nestlé Health Science SA. The company was founded in 2000 and is headquartered in Central, Hong Kong. Hutchison China MediTech Limited is a subsidiary of Hutchison Healthcare Holdings Limited.
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