Warner Chilcott Shares Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Warner Chilcott (NAS: WCRX) fell close to 12% in early trading after reporting third-quarter earnings that came in a penny below expectations. Revenue from a core osteoporosis treatment, Actonel, also declined sharply.

So what: Generic versions of the drug have made their way to Warner Chilcott's home turf of Western Europe. Actonel sales fell 38% to $166 million as a result.

Now what: With the stock trading for less than five times earnings estimates, the stock seems cheap enough for value speculators. Yet an unanswered question remains: How much would further generic erosion hurt growth, and are those losses priced into today's quote? Please weigh in using the comments box below.

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At the time this article was published Fool contributorTim Beyersis a member of theMotley Fool Rule Breakersstock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim'sportfolio holdingsandFoolish writings, or connect with him onGoogle+or Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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