Allergan PLC. (AGN)

It will take 6-8 months for them to merge with PFE-N. You have to understand PFE-N. Before the deal, PFE-N was trading in the $35 range and then dropped to $30 on rumours of the deal. There is a double digit percentage discount to the price of the deal. Post- the merger, by 2018, it will be 10% accretive to all metrics.

Healthcare has been a favourite of his over the last couple of years. He got stopped out over the last 6 weeks. The government’s focus on drug prices has been a problem. It’s a great business and has come back very nicely. He figures it will get taken out at some point at a higher price.

Pharmaceuticals. A growing company from both a drug standpoint and a pipeline standpoint of what they can bring to market. It has a very brilliant CEO who engages in value creating capital allocation. Made a lot of press recently when they sold their generics business to Teva (TEVA-N). The company is known to do very smart transactions in both Buying and Selling. Trading at about 16.5-17 times earnings, but he thinks it is growing 3 or 4 times the growth rate of the market.

A specialty pharma company, and is now #3 in terms of size in North America. It is a tax inversion story and is headquartered in Dublin Ireland. Transformed itself by 2 huge acquisitions. Very fast growth with the top line growing at about 11% per year and bottom line growing at almost 20% a year. Trading at a 16.2X forward earnings multiple and a PEG ratio of about .91. Very, very reasonably priced.

Likes the Allergan deal and thinks that once it is fully integrated you will see a drop to the bottom line. The stock should grow its top line by 10%, bottom line by 15%-20%. This is the #3 generic pharmaceutical company in the US. They also do some branded stuff. This is really a play on healthcare and aging demographics. A very strong grower and one of the ones that has really been kind of overlooked in what was a very strong run up in health care. Hasn’t performed to the extent that it could. A solid core business and has tremendous upside.

Pharmaceutical sector is really attractive. The industry has moved from more science based to more distribution business model based. This company has made a business of making acquisitions, tucking them in, cutting costs and then using their distribution power to basically put more apples on the applecart when they go out to sell their product. They have done it successfully time and time again. Looks very attractive.

Acquisition of Forest Labs is definitely a positive for them. Have excellent prospects in their R&D groundbreaking drugs. On a PE basis, the multiple is always insane, however the key thing to look for is the PEG ratio. When this is under 1 that is an opportunity to purchase.

(Top Pick Jul 6/12, Up 13.17%) A problem with them not hitting a settlement. Next product in a little while. 28 times earnings. Growth is so high that it will be less than 10. Second largest generic drug company in the world. TEVA has a whole lot of warts on it at this point.

(Top Pick July 6/11, Up 15.96%)

Recently bought a company in Europe, largest producer of a generic drug for ADD. It is highly accretive and analysts have been slow to raise their earnings estimates. Executed nicely and have close to 30% market share in generic Lipitor.