Large Cap Value
Current Price: $29.03
Teva is a pharmaceutical company based in Israel that develops generic and specialty drugs. Teva is a 29 billion dollar company thus classifying it as a large cap value. This company has come into hard times recently with both the healthcare industry decline as well as some internal turmoil associated with a management shakeup.
Teva has noted a slight earnings decline over the last several quarters, but appears to be picking up steam again. They are sporting a very attractive forward P/E of around 6 and seems to have turned around any issues with cash flow and revenue declines. Profitability is expected to increase over the latter part of 2017 due to several product launches and multiple cost savings programs initiated. Teva faces little competition from the other generic industry, and is certainly a major player in this realm. I like their positive P/B (0.97) and well as P/FCF (14.56). Sales over the last 5 years has been 3.6% but the Q/Q sales has spiked to 17%.
It appears that Teva has hit a bottom or is near a bottom technically speaking. They are well under the 5 year low of PE range (sub 10 – 35) and are showing oversold signals from a RSI perspective. Teva is well below any major moving averages, but has recently shown interest to approach its 20 day SMA. Fibonacci retracement does not show any significant resistance levels until around $37.
From a fundamental and technical aspect, Teva does not look as promising as some other companies in the stock market. However, digging deeper into this picture, this is a 30 billion dollar company that appears to have hit bottom and has most, if not all, of their pricing burden already built in to their current price around $30 a share. Teva is approaching answers for the leadership gaps in a CFO and CEO as well as picking up steam in the generic market.
I like Teva a lot in this space as it has really no where to go but up. This coupled with the current 4.68% dividend yield and anywhere near approaching the resistance levels of $35-$37 dollars price growth over the next year could account for 20% plus gains for the patient investor. I think this is an attractive choice not only for the income investor, but those seeking growth as well.
I am not telling anyone to buy this or any stock I discuss in this blog, this is simply a vehicle for me to share my thoughts. The stock market can be extremely volatile, and is not suitable for most investors. Do your own homework and invest at your own risk.