Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Five Reasons Teva Should Have Pfizer Running Scared


No matter what happens with health-care reform, this company will rule.

With fuming Americans lashing out at health-care town-hall meetings across the US, this week, I thought it was only appropriate to discuss the sector today.

Like much of the general public, I'm all rowed up about the Obama administration's plan to reform health care. The possibility of a government-run socialistic insurance program infuriates me. I already pay for my own health insurance, thank you very much.

While the government's reform will, in my opinion, most definitely destroy the quality of health care in the US, its potential impact on health-care stocks is unknown. Thus, just as investors needed to pad their portfolios with recession-resistant stocks over the past 2 years, investors now need to focus on finding government-resistant companies.

That's why I am bullish on Teva Pharmaceuticals (TEVA). Regardless of whether the $1 trillion legislation is passed, Teva should remain a winner in the drug-manufacturing business.

1. While Big Pharma competitors like Merck (MRK) and Pfizer (PFE) will lose pricing power from Obama's pledge to greatly reduce drug prices, Teva's position as the world's largest generic manufacturer will help it flourish. With a 22% market share of the US generic market, Teva will certainly be primed to capitalize on the expected growth for generic drugs.

On the other hand, even if the plan falls through, generic drugs already account for 60% of prescriptions filled, so there's enormous demand for generics with or without a reform.

2. In contrast to the slow- to no-growth expected at large US dug companies like Eli Lilly (LLY) over the next 5 years, analysts peg Teva to grow nearly 18% per year through 2014. Wall Street has high expectations, but they aren't unreasonable.
< Previous
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos