Stock price when the opinion was issued
Proof that not every stock he buys goes up ;) He's held for years. Recent earnings were weak, and stock fell ~15%. Generating significant free cashflow, which now will be used to buy back shares incredibly cheaply. It's the best use of capital at this time. FDA investigation in one of their plants, costing about $300-400M in EBITDA. Yield is 4+%.
The pharma company produces Lipitor as one of its brands. It has embarked on a divestiture strategy that is allowing it to focus on core competencies and reduce costs. The are on target for $450 million in new product launches. It trades at 7x earnings and below book value. Cash reserves are growing as debt is aggressively retired. Its dividend is backed by a payout ratio under one-third of cash flow. We recommend placing a stop-loss at $8.50, looking to achieve $41 -- upside potential of 30%. Yield 4.5%
(Analysts’ price target is $14.11)