Head-To-Head Survey: Mallinckrodt PLC (MNK) versus Check-Cap (CHEK)

Mallinckrodt PLC (NYSE: MNK) and Check-Cap (NASDAQ:CHEK) are both medical companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Mallinckrodt PLC and Check-Cap, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mallinckrodt PLC 0 4 13 0 2.76
Check-Cap 0 0 3 0 3.00

Mallinckrodt PLC currently has a consensus target price of $59.97, suggesting a potential upside of 91.78%. Check-Cap has a consensus target price of $6.00, suggesting a potential upside of 341.18%. Given Check-Cap’s stronger consensus rating and higher probable upside, analysts clearly believe Check-Cap is more favorable than Mallinckrodt PLC.

Profitability

This table compares Mallinckrodt PLC and Check-Cap’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mallinckrodt PLC 12.64% 15.28% 5.20%
Check-Cap N/A -98.88% -80.97%

Institutional and Insider Ownership

98.0% of Mallinckrodt PLC shares are owned by institutional investors. Comparatively, 19.3% of Check-Cap shares are owned by institutional investors. 0.5% of Mallinckrodt PLC shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Mallinckrodt PLC has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500. Comparatively, Check-Cap has a beta of -0.51, meaning that its stock price is 151% less volatile than the S&P 500.

Earnings & Valuation

This table compares Mallinckrodt PLC and Check-Cap’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Mallinckrodt PLC $829.90 million 3.74 -$153.20 million $4.10 7.63
Check-Cap N/A N/A -$8.82 million ($0.59) -2.31

Check-Cap has higher revenue, but lower earnings than Mallinckrodt PLC. Check-Cap is trading at a lower price-to-earnings ratio than Mallinckrodt PLC, indicating that it is currently the more affordable of the two stocks.

Summary

Mallinckrodt PLC beats Check-Cap on 9 of the 12 factors compared between the two stocks.

About Mallinckrodt PLC

Mallinckrodt public limited company develops, manufactures, markets and distributes branded and generic specialty pharmaceutical products and therapies. The Company focuses on various therapeutic areas, such as autoimmune and rare disease specialty areas, including neurology, rheumatology, nephrology, ophthalmology and pulmonology; immunotherapy and neonatal critical care respiratory therapies; analgesics and hemostasis products, and central nervous system drugs. Its segments include Specialty Brands and Specialty Generics. The Specialty Brands segment produces and markets branded pharmaceutical products and therapies. The Specialty Generics segment produces and markets specialty generic pharmaceuticals and active pharmaceutical ingredient (API) consisting of biologics, medicinal opioids, synthetic controlled substances, acetaminophen and other active ingredients. Its product portfolio includes Acthar, Inomax, Ofirmev, Therakos immunotherapy, Hemostasis products and StrataGraft.

About Check-Cap

Check-Cap Ltd. (Check-Cap) is a clinical-stage medical diagnostics company. The Company is engaged in the development of an ingestible imaging capsule that utilizes low-dose X-rays for the detection and imaging of colonic polyps and colorectal cancers, or CRC. The Company’s system consists of main components, such as ingestible scanning capsule; Capsule Positioning System (CPS), a recorder worn on the patient’s back, and a personal computer (PC)-based work station for data reconstruction and image processing. The Company’s scanning capsule will be swallowed and propelled by natural motility through the gastrointestinal tract and excreted naturally with no need for retrieval for data collection. Its scanning capsule employs low-dose X-rays, which allow the system to image the interior lining of the colon even when surrounded by intestinal content. Its capsule transmits information to a receiving device worn on the patient’s body that stores the information for off-line analysis.

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