Thursday, March 09, 2017 6:32:56 PM
A firestorm in Washington has created a fire sale for shares of this undervalued stock.
John Persinos
Mar 9, 2017
https://www.thestreet.com/story/14033238/1/battered-biotech-teva-is-a-smart-contrarian-buy-now.html?puc=yahoo&cm_ven=YAHOO
As politicians race to replace Obamacare, researchers are racing to replace drugs that are on the verge of patent expiration. One opportunity points the way: biologics.
Teva Pharmaceuticals (TEVA) is an emerging leader in biologics, but its share price is getting unduly punished by the legislative circus in Washington, D.C. That spells a buying opportunity for contrarians.
Israel-based Teva is the world's biggest manufacturer and marketer of generic drugs. The company also develops patented biologic treatments, which are derived from humans, animals or microorganisms. Biologics can be composed of proteins, sugars, or living cells and tissues.
Biologic drugs include antibodies and vaccines. Teva also is pursuing the market for "biosimilars," which are generic, less costly copies of biologics.
Teva is readying several new biosimilar drugs for market, to complement its existing pipeline of products. Gene-based biologics are in the vanguard of cancer research, but as they lose patent protection the door is opening for biosimilars.
Teva has captured the lead in these hot areas of drug research. And yet, shares of Teva have been steadily falling for over a year now, as concerns about patents, management shakeups, and a debt-creating purchase have spooked investors. Political grandstanding on health care this week has furthered the decline.
But investors are missing the point: Teva is a smart pharmaceuticals play with exposure to both generic and branded portfolios. And it's a great growth stock for investors to hang onto for the long run.
Year to date, Teva's stock has plunged by more than 9.2%. But in 12 months, its losses have been much deeper, at nearly 42%. While 2016 was a rough year for all Big Pharma players, Teva faced additional challenges.
The company's operations in Mexico, Russia, and Ukraine came under investigation by the Department of Justice and Securities and Exchange Commission concerning the Foreign Corrupt Practices Act of 1977. The U.S. Patent Office invalidated two of Teva's patents, including one for the lucrative multiple sclerosis drug Copaxone, which was contested by rival Mylan (MYL) .
Teva also initiated the acquisition of Allergan's (AGN) generics unit, which cost $40.5 billion and increased the company's debt burden.
And, most recently, Teva announced the sudden departure of CEO Erez Vigodman. On the day the resignation was announced, the company lost $1.5 billion of its market capitalization
Also pressuring Teva's stock are the challenges facing the entire drug industry, such as Trump's Twitter threats to take on pharmaceutical prices and the Republican Party's ongoing Obamacare repeal and replacement debacle.
The "Trumpcare" replacement bill appears to be dead on arrival, a fact that's punishing drug and health services stocks across the board.
None of these events have sat well with investors, which is their loss. They've unfairly punished Teva's stock. But that's a gain for savvy investors who realize the "pluses" in Teva's column. The Allergan purchase made Teva the world's largest manufacturer of generic drugs. And in the most recent quarter, it helped boost revenue 33%.
The company also has plenty of assets it can sell to reduce debt and invest in new drug research to pump up its pipeline.
Teva just needs the proper management, and once it is able to install a permanent CEO (currently chairman Yitzhak Peterburg is serving as interim chief exec), Wall Street will change its mind about this drug kingpin and its stock.
That means, right now, Teva is cheap. If the company can meet its earnings-per-share target of $4.90 to $5.30, its forward price-to-earnings (P/E) ratio is currently around 7.
Nor should investors ignore the fact that Teva pays out a healthy dividend of nearly 4%. That should yield steady income while bullish investors wait for their deserved long-term gains. <<<
Recent TEVA News
- Teva Presents New Phase 3 Efficacy, Safety and Tolerability Data from SOLARIS Trial Evaluating TEV-‘749 (olanzapine) as a Once-Monthly Subcutaneous Long-Acting Injectable for Adult Patients Diagnosed with Schizophrenia • GlobeNewswire Inc. • 09/21/2024 08:15:00 AM
- New Data Provide Treatment Insights into Options for Switching Adult Patients Diagnosed with Schizophrenia to UZEDY® (risperidone) Extended-Release Injectable Suspension from Perseris® (RBP-7000) • GlobeNewswire Inc. • 09/21/2024 08:10:00 AM
- Teva to Present at the Bank of America 2024 Global Healthcare Conference • GlobeNewswire Inc. • 09/11/2024 08:30:00 PM
- GameStop plunges 11% on stock offering, DJT drops post-debate, GSK fails shingles vaccine trial • IH Market News • 09/11/2024 10:25:41 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/04/2024 11:40:42 AM
- Teva to Present at the Morgan Stanley 22nd Annual Global Healthcare Conference • GlobeNewswire Inc. • 08/26/2024 09:00:00 PM
- Form 144/A - Report of proposed sale of securities: [Amend] • Edgar (US Regulatory) • 08/14/2024 11:06:00 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/13/2024 08:09:34 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/13/2024 08:06:50 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/13/2024 08:02:28 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 08/09/2024 07:59:27 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 07/31/2024 08:06:33 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 07/31/2024 11:00:57 AM
- Teva Announces Strong Growth in Second Quarter Revenues mainly driven by Generics Products in All Regions and AUSTEDO®; Raises 2024 Financial Guidance • GlobeNewswire Inc. • 07/31/2024 11:00:00 AM
- US Index Futures Up Ahead of Fed Decision; Oil Prices Surge Amid Middle East Tensions • IH Market News • 07/31/2024 10:01:30 AM
- Teva and Sanofi Announce Accelerated Timeline for Anti-TL1A Phase 2b Program in Patients with Inflammatory Bowel Disease • Business Wire • 07/25/2024 05:30:00 AM
- Teva Announces First Phase 3 Evidence of Efficacy and Safety of an Anti-CGRP Monoclonal Antibody in Children in AJOVY® (fremanezumab) SPACE Trial for Prevention of Episodic Migraine • Business Wire • 07/18/2024 12:30:00 PM
- Teva to Host Conference Call to Discuss Second Quarter 2024 Financial Results at 8 a.m. ET on July 31, 2024 • Business Wire • 07/02/2024 10:00:00 PM
- Les nouvelles données portant sur AJOVY® (fremanezumab) dans la prévention de la migraine remettent en question les pauses thérapeutiques • Business Wire • 06/28/2024 10:34:00 PM
- Neue Daten zu AJOVY® (Fremanezumab) zur Migräneprävention stellen Behandlungspausen in Frage • Business Wire • 06/28/2024 07:41:00 PM
- New AJOVY® (fremanezumab) Migraine Prevention Data Challenges Treatment Pauses • Business Wire • 06/28/2024 03:30:00 PM
- Teva Reaches Agreement With the Israel Tax Authority to Resolve All Pending Litigation for the Company's Taxable Years 2008-2020 • Business Wire • 06/25/2024 12:00:00 PM
- Teva Announces Launch of Authorized Generic of Victoza® (liraglutide injection 1.8mg), in the United States • Business Wire • 06/24/2024 01:50:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/17/2024 12:03:34 PM
VHAI - Vocodia Partners with Leading Political Super PACs to Revolutionize Fundraising Efforts • VHAI • Sep 19, 2024 11:48 AM
Dear Cashmere Group Holding Co. AKA Swifty Global Signs Binding Letter of Intent to be Acquired by Signing Day Sports • DRCR • Sep 19, 2024 10:26 AM
HealthLynked Launches Virtual Urgent Care Through Partnership with Lyric Health. • HLYK • Sep 19, 2024 8:00 AM
Element79 Gold Corp. Appoints Kevin Arias as Advisor to the Board of Directors, Strengthening Strategic Leadership • ELMGF • Sep 18, 2024 10:29 AM
Mawson Finland Limited Further Expands the Known Mineralized Zones at Rajapalot: Palokas step-out drills 7 metres @ 9.1 g/t gold & 706 ppm cobalt • MFL • Sep 17, 2024 9:02 AM
PickleJar Announces Integration With OptCulture to Deliver Holistic Fan Experiences at Venue Point of Sale • PKLE • Sep 17, 2024 8:00 AM