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Pharmaceutical stocks are getting a lot of traction in recent weeks and Dr. Reddy's Laboratories Limited (NYSE:RDY) seems to have joined the race. Reddy's (RDY) turnaround has been remarkable. In the past 12 weeks, Reddy's has beaten the S&P 500 by about 10%.

Merck & Co, Inc (NYSE:MRK) has recently authorized Reddy's to produce versions on Proscar and Zocar. FDA has also approved Merck's (MRK) Propecia to be manufactured by Reddy's. Along with Allegra, Reddy's has four major generics coming out soon with very good sales potential. With more generics in its pipeline waiting for FDA approval, Reddy's is strongly set for growth.

Reddy's is a fairly geographically diverse company with operations in developed economies like US and Germany and well as in developing economies like India and Mexico. Reddy's recent acquisitions in Germany (Betapharm) and Mexico (Roche's API) will also increase Reddy's revenue growth and profitability. Trading at below $32 now, with a forward P/E of 20.82, Reddy's stock can easily move above $37 in the next 6 months.

RDY 1-year chart:

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Source: Reddy's is Ready for Aggressive Growth