Stockchase Opinions

Paul Harris, CFA Teva Pharmaceutical TEVA-N BUY Apr 26, 2018

An Israeli company that trades in the US. The largest generic pharmaceutical company in the world. They went through a difficult management period after its founder passed away. The important part of the generics is not really the molecule part (if you have smart people you can copy the molecules). The important part is the legal aspect. And here this company is very very strong. It is going to take a while to restructure the company, but they have a great franchise. Over a 3 to 5 years’ time horizon it is a great story to buy.

$17.670

Stock price when the opinion was issued

biotechnology pharmaceutical
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DON'T BUY
They went from an in incredibly well managed drug company and then management decided to develop their own drugs and make mistakes. It is difficult to unwind these problems. Turning around a company like this will be difficult because of the debt. This is a highly speculative stock.
HOLD
Generic brand companies like Teva have struggled in the last 5 years has they competed with each others. Pfizer is in the process of buying one of their competitors and the Pfizer stock dropped 5$ on the announcement. Doesn't own Teva, purchased United Heatlth recently. You can hold but it's not a name he would hold due to the risk and they have no value added.
BUY
It's time to get back in. They all went crazy and then slid on sympathy when valiant went bust. There is tremendous value here. His model price is $21.26 or 63% upside. They presented earnings and the balance sheet looks great.
DON'T BUY

Doesn't offer growth. The stock is weak and will stay weak.

DON'T BUY
Involved in the opiate crisis. Balance sheet is weak. Overall topline growth is low. Stay away. A lot of problems still to overcome.
DON'T BUY
Tends to avoid companies with a ton of debt. Management missteps, and investors are paying for those. In the depths of a tough turnaround. He'd rather own a VTRS, where the debt is manageable, balance sheet's in better shape, with a better growth trajectory.
DON'T BUY
He's put the white flag up on this one. It's about macro interest rates, currency moves. Don't waste your time with these story stocks. His model price is $18.80, and it could have all the fundamentals, but the macro waves swamp the boat. Go with the big names.
BUY ON WEAKNESS
Has owned company for a long period of time in the past. Previous reasons for owning stock not present anymore. Waiting to see if new drugs are invented/patented.
DON'T BUY

Massive share price appreciation not sustainable. 
Large debt load presents difficulties.
Does not own shares.
Would not recommend buying at this time. 

DON'T BUY

It's cheap and has momentum, but that's all it has now. It never grabbed him.