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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 41634  
Subject: Re: TEVA Date: 3/6/2013 4:58 PM
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Does anybody else see this as a nice buy?


Unfortunately, holding Teva's shares is probably going to require patience. The company has been hurt by a slowdown in its Copaxone franchise coupled with a drop-off in its generics business. Earnings are expected to be flat, or worse, this year.

On the plus side, the stock is quite cheap, in other words low expectations are priced in. The company pays a good dividend, coupled with a low pay-out ratio, which Value Line predicts will be increased by 13% annually (the dividend payment, not the payout ratio). Additionally, the company is buying back shares now that the stock appears to be so reasonably priced.

Basically, it is depressed economies in Europe that accounts for a drop off in the sale of generics. Teva is trying to expand its foot-print.

Although the company faces near-term challenges, it's worth noting that Value Line give it a 1 for Safety (highest) and an A for Financial Strength (A++ is highest). They predict that the share price for 2015-17 will be between $65 and $80 based on a P/E of 12 (still fairly modest).

On a risk/reward basis this stock looks like a good bet, assuming, of course, that management can turn the ship around.

kelbon
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