In our latest stock trading screen, the #1 biotech stock (according to Investor's Business Daily) showed up — Amphastar Pharmaceuticals (AMPH), notes Mark Skousen in his specialty advisory service, Five Star Trader.

Based in California, Amphastar Pharmaceuticals develops, manufactures and sells a variety of injectable prescription and genetic drugs (a growing industry).  It also works on drugs that can be inhaled or delivered via the nose.

During the third quarter, Amphastar's sales surged 50% to $181 million. Adjusted earnings ramped up 203% to $1.15 per share. Amphastar recently acquired the rights to sell Baqsimi from Eli Lilly (LLY). It’s a nasally administered medicine for people with diabetes and low blood sugar.

Also during the quarter, sales of glucagon, a treatment for low blood sugar, rocketed 107% to $29.5 million. Glucagon is Amphastar's biggest moneymaker. Revenue from asthma inhaler Primatene Mist jumped 35% to $24.8 million.

The biotech firm has beaten Street estimates four quarters in a row, and earnings are steadily rising. When it reports at the end of this month, it is projected to earn 87 cents per share, and revenues are predicted to hit $175 million, a 30% increase from a year ago.

Amphastar is selling for 14.5 times expected earnings this year, and has a low PEG ratio of only 0.65 (anything less than 1 is considered excellent). It looks like a good deal to me. Let’s add Amphastar Pharmaceuticals to our Five Star Trader portfolio, and set a protective stop of $44 a share here.

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