Teva Pharmaceutical (TEVA)

TEVA-N vs. MYL-Q. He does not like either at these prices. They are both generics manufacturers. There are lots of headwinds on pricing in these categories. We have had a lot of noise on pricing of pharmaceuticals. The FDA is going to alleviate the delays on getting new drugs to market. He wants to be in pharmas that have innovation. He is concerned about how their business model will fair over the next 5 years.

It was their guidance that hit them as well as an earnings miss. There were a number of factors that came up. Technically, it has broken badly, and fundamentally there are major question marks. If you own, take your capital and invest it somewhere that has more near term brighter prospects.

A very interesting company. They’ve fallen because they cut their dividend, etc., and are going through a new CEO. It is one of the biggest generic drug companies globally. Just made a big acquisition, which is not going very well. However, they have some really great products. There is a good opportunity if you buy it at these levels that you could do very well.

The whole generic drug space is poison right now. Earnings are starting to reflect that. Its current model price is kind of useless, but it was at $47.90. Thinks earnings estimates are going to come down substantially after yesterday, probably by 50%. Prefers Endo International (ENDP-Q), and sold half his position.

Doesn’t know the seasonality, but the technicals are very distinct. The stock is in the steep downward trend, and just broke through another support level. There is no indication of bottoming.

A generic producer of pharmaceuticals, the largest in the world. It just reported and missed, and the stock got pounded. Thinks it is a “no touch” for awhile. Clearly there will be pressure on the generics. If you own this, you are probably looking at a good year before it digs itself out of this mess.

There are some competitive pressures with one of their main drugs, and there is not a lot of visibility for future growth. It is always hard to take losses, but she would get out of this. As an alternative, she would suggest Johnson & Johnson (JNJ-N) or Abbott Labs (ABT-N), which are very diversified.

A very interesting company because of the strength of its manufacturing assets, and a relatively deep management team with a global presence. His concern was pricing. The practices Valeant (VRX-N) has been criticized for, taking over a product by buying a company or buying a product that sold at $10 a pill and making it a $100, is a practice that is not only unique to Valeant. Chart prices are going to go down, this is going to have an issue on Teva. Dividend yield of 4.3%.

He loves the space. Nobody wants these companies. There is tremendous value. He has a model price of $52, and this closed at $29.01, an 80% upside. He would buy the name, but if there was a negative transit again of EBV -1 of $27.32, he would exit the position. Sees a lot of value. (See Top Picks.)

This has had a really tough few quarters. There have been a few stumbling blocks on the FDA front and on competition, but she would say that it is bottoming out at this time. Valuation wise, it is very, very attractive. 4.9% dividend yield.

This has had a really difficult time in the last 12 months. There is a lot of worry about drug pricing. He would step aside for now, but keep an eye on it. There will be a return of interest in this name.

A generic manufacturer of drugs. It’s been a good business for many, many years. There had been a bit of a downturn, and they had to sell some assets to stay at the same level they were at. According to his numbers, that was a good move, as returns are starting to move back up.

The largest generic manufacturer of drugs. They got themselves in trouble in the last number of years by trying to become an actual Pharma company with R&D, with not great success. The generic business is very price intensive. It is not an R&D company, it is a manufacturer. He would pass on this.

The world’s largest drug manufacturer. They are reporting tomorrow morning. The generic drug prices in the US have remained under significant pressure. He sold his holdings in January. There is a very low price to earnings, but their business is in decline. 4.3% dividend yield.

It was announced this was going to be investigated in terms of unfair practices. That was post the loss of the Copaxon drug, which was their branded pharmaceutical. This was followed by a small announcement that Israel was effectively going to do the same thing. He would be more afraid of the US than the Israeli regulators. At this level, it is at fairly attractive level for them to turn it around. The balance sheet is reasonable. A higher risk, so he wouldn’t have them in his portfolios.