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5 Signs You're Getting Robbed at the Hospital"Generic drug mak Teva Pharmaceutical, Ltd. (NASDAQ: TEVA) delivered respectable earnings results," says Jack Adamo, who added the stock his Insiders Plus model portfolio.
"The company's earnings were up 4% on a proforma non-GAAP basis. In this case, that's the correct measurement. Net GAAP earnings were up tremendously, but aren't really representative of normal business factors.
"Although Teva gets much of its earnings from its proprietary multiple sclerosis drug, Copaxone, its primary business is generic drugs. That segment is inherently lumpy because profitability is greatly affected by which generic drugs it brings to market before any other generic company.
"By law, the first company to do so gets a 180-day window to be the exclusive generic seller. It can charge higher prices before other competitors enter the market.
"Teva expects its new product launches to be weighted toward the end of the year. As of April 27, it had 197 applications awaiting final FDA approval, including 40 tentative approvals.
"Teva believes it is the first to file on at least 84 of the applications, relating to products with annual U.S. branded sales exceeding $53 billion. Since the beginning of the year, the company has received 283 generic approvals in Europe, relating to 81 compounds in 153 formulations.
"The company expects to earn around $3.30 in 2009, up 15% from last year, with a 30% increase in 2010. Lately, the stock has been weaker than I would expect, given these impressive numbers; on-balance-volume in particular is low.
"The lack of interest in the stock may just be due to money leaving the safer pharmaceutical sector for the wide-open spaces of financial stocks. We consider Teva Pharmaceuticals a buy up to $46."
Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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