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Perrigo Company (NDQ: PRGO)

Originally recommended on June 22/09 (IWB #2923) at $26.81. Closed Friday at $36.77. (All figures in U.S. dollars). The shares in this generic drug maker closed on Friday at $36.77 which means we are ahead 37.2% since my June recommendation, including a dividend of 5.5c a share received in August. The company is due to release first quarter 2010 results on Nov. 2, so certainly hold the stock until the earnings report comes out.

Perrigo has filed for permission to produce a generic version of Rogaine which, if granted, could have a very positive impact on the company's outlook. In other good news, Perrigo was released from a lawsuit that had been brought against them by Stiefel Laboratories which is a division of Glaxo SmithKline (NYSE:GSK).

This stock and TEVA are two of my favorite generic drug plays and are particularly attractive given the context of the Obama healthcare program that is likely to be approved by Congress in the coming months. It is very likely that the use of generic drugs will be specified in the legislation so both Perrigo and TEVA should be long-term beneficiaries.

Action now: Hold.

Source: Perrigo: Worth Holding Onto