Questions are mounting for AaiPharma. But try telling that to Wall Street. Five of the seven investment houses who cover the stock have a buy rating on it, including Wachovia Securities, Banc of America Securities and CIBC World Markets (all of whom, no surprise, have big pieces of AaiPharma’s [nasdaq:AAII] credit). These analysts seem to believe that the Wilmington, N.C., company has a painless way of making profits by buying potential has-beens in pain pills on the cheap. AaiPharma markets narcotics such as Darvocet and Darvon, drugs that in an age of Vicodin and Percoset summon up quaint images of apron-clad country club wives knocking back their mothers’ little helpers with bourbon. But analysts at Raymond James & Associates have been raising red flags for months now about AaiPharma’s quality of earnings. In a series of withering reports the two analysts raise questions as to whether the company is “channel stuffing,” or unloading inventory onto wholesalers in order to make sales.
