5-Star Stocks Poised to Pop: Teva
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, generic-drug giant Teva Pharmaceutical Industries (NAS: TEVA) has earned a coveted five-star ranking.
With that in mind, let's take a closer look at Teva's business and see what CAPS investors are saying about the stock right now.
|Headquarters (Founded)||Petach Tikva, Israel (1901)|
|Market Cap||$35.9 billion|
|Trailing-12-Month Revenue||$17.1 billion|
|Management||CEO Shlomo Yanai (since 2007)|
CFO Eyal Desheh (since 2008)
|Return on Equity (Average, Past 3 Years)||11.2%|
|Cash/Debt||$1.1 billion / $8.2 billion|
|Competitors||Mylan (NAS: MYL) |
Novartis (NYS: NVS)
Watson Pharmaceuticals (NYS: WPI)
Sources: S&P Capital IQ and Motley Fool CAPS.
This past summer, ValueMan1988 tapped Teva as a healthy value selection:
Generic drugs are the way to go. [Teva] is cheap compared to peers. Look at the chart the last 10 years. Then look at the fundamentals. Has a dividend to top it off. [Teva] has dipped dramatically recently (so has the market) so it looks like a great time to buy. Hopefully the chart the next 10 years will look the same as it has the last 10.
In fact, Teva currently trades at a cheapish P/E of 12.1. That represents a discount to main generic rivals Mylan (19.6), Novartis (13.2), and Watson (45.3).
CAPS member kpoeppel elaborates on the bargain opportunity:
Mr. Market is depressed by the negative headlines surrounding Copaxone and [Laquinimod]. I bought [Teva] for the generics business, not for the higher-risk new drug development. I just can't bet against generics for the long term as consumers and governments try to save money on health care. ...
Generic drugs aren't going away and as global populations age, more and more will be needed. Emerging market demand will increase rapidly as basic health care will be one of the first priorities. [Teva] is an "emerging market" play that is currently out of favor from all of the negative headlines. It may be "efficiently priced" for the short term, but I believe it is mispriced for the longer term.
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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of Teva. Motley Fool newsletter services have recommended buying shares of Teva and Novartis. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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