white oval medication pill beside blister pack

Cumberland Pharmaceuticals (NASDAQ:CPIX) stock has been in the headlines in the last week after a significant move up. The share price jumped from a close of $2.20 to an open of $4.13 after the company announced the FDA had approved expanded labeling for Caldolor, an intravenously delivered formulation of ibuprofen, to now include use in pre-operative administration. The non-narcotic pain reliever may now be administered just prior to surgery to enable patients to wake up from their procedure in significantly less pain. 

Ownership

The news that came out is great for the company. Investors obviously thought the same as over 200M shares were traded the day after the news. However, we can take a deeper look into who owns shares and why it is important to note.

If insider ownership is high, the people in the know want to be invested. This is positive for other investors. Although traders may not know the reasons yet, this can be a clear indication that something more is coming. So who owns CPIX shares?

The total market cap for the company is $85.6M. Insiders own 37.7% of the company. A J Kazimi, the CEO and chairman of Cumberland Pharmaceuticals, owns $5.77M. This makes up 6.7% of the company. He also bought more shares of the company after the news, at a price of $4.61. Institutions own 8.8% of the company. Some names that make up this figure: The Vanguard Group, BlackRock Institutional Trust Company, Berkshire Asset Management, Dimensional Fund Advisors and Renaissance Technologies. Finally, mutual finds own 4.2% of the company.

In total, this makes up more than 50% of the company.

Technical View

This stock also grabs our attention from a technical point of view. The monthly chart has failed to close above $8 since early 2010. This is looking back quite far. But we know that if resistance is broken that has lasted this long, we could see a strong move up. There won’t be much resistance between $8 and $10.

Financials

On November 9th, Cumberland released their Q3 2021 results. Net revenues from continuing operations during the quarter were $8.1M and totalled $27.7M for the first nine months of 2021, up 1.8% compared to the same period in 2020. The company also recorded an additional $0.5M in revenue during the third quarter and $1.5M year to date, associated with divested product rights for two brands it is no longer distributing. The Company’s financial position included $87.6M in total assets, with $25.8M in cash, $41M of total liabilities and $46.8M of shareholders’ equity at the end of the quarter.

More to know

Forbes mentioned Cumberland Pharmaceuticals in an article regarding Nashville being the health services capital. “The smaller but growing pharmaceutical sector is led by publicly traded, specialty drug producer Cumberland Pharmaceuticals, whose development pipeline and FDA-approved products address some of the world’s biggest health challenges.

The company has a wide portfolio of FDA-approved brands. They also have Phase II clinical programs underway evaluating their product candidates in patients with cardiomyopathy associated with Duchenne Muscular Dystrophy, Systemic Sclerosis, and Aspirin-Exacerbated Respiratory Disease.

Final thoughts

Cumberland has many projects in the work to build off this current good news. We think the company is undervalued at $85.6M. $10 is a short term target as momentum grows with little resistance above $8. The shares available are low and the demand is high. Long term potential could see this stock grow tremendously and compete with companies that currently have much larger market caps.

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