Thanks Dan. You actually made me do something else. I am mailing Teva to get some detail about margins for branded pharma and generics. Would be nice if they respond. Will keep you posted.
Thanks Dan. I have already written about the assumptions clearly under the table with a *. Not sure if you read this. ------ "So if we take out Copaxone from 2011 sales and assume the net margin to remain the same, we arrive at a net income of $2221.12 million with an EPS of $2.49, resulting in a P/E of 16.08."
I don't mind adding another column with margins but what margin will be correct. Once again the question of the margin used is too high and too low will come into the picture.
Thanks Dan. I just removed Copaxone sales of 3.57 billion from 2011 sales and calculated net income and EPS (assuming the net margin to remain the same). Teva's 10 year (2002-2011) net margin is 14.78 and 2011 net margin wasn't way off from there.
Thanks for some great insights Ozcutty. I agree with you. As The Hammer suggested FCF calculation would have been the best method to zero in on the right value.
I read a lot about Copaxone expiry affecting the company and why Teva is falling because of that. Just wanted to find out if its a reasonable assumption. I know I sort of did a worst case analysis to see what happens if Copaxone sales drops to zero today ( we know its not going to happen). Result - 16 times earnings after subjecting valuation to a worst possible outcome.
I think Teva is suffering from a Patent Cliff Syndrome.
With regard to the CEO part, I think there is some amount of pessimism in the market with respect to Teva and he is carrying the bulk of it. May be he paid a bit extra to buy those companies but acquisitions are never easy.
Thanks for your comments Steven Anthony and sailor27. I agree with you. Location seems to weigh a lot on Teva.
Do you know any other company that has substantial manufacturing facilities located in Israel? Just to check how other stocks are doing and compare them.
Thanks for your comments, tavu23. Not sure if you jokingly said that. But to clarify your question.
"Our executive offices and a substantial percentage of our manufacturing capabilities are located in Israel. Our Israeli operations are dependent upon materials imported from outside Israel. We also export significant amounts of products from Israel. Accordingly, our operations could be materially and adversely affected by acts of terrorism or if major hostilities were to occur in the Middle East or trade between Israel and its present trading partners were curtailed, including as a result of acts of terrorism in the U.S. or elsewhere. " ( Teva Annual Report 2011 - Page 14)
Patent expiry of its 3.5 billion Multiple Sclerosis treatment Copaxone. It is also facing some serious competition in the market. They have racked up some debt and intangibles due to aquisitions.
Thanks for your comments. I agree, they should focus on developed markets and may be push for generics in the emerging markets. There has been too much hype on emerging market growth and how it will improve pharma sales. Its just not easy to be there
Bristol-Myers Squibb: The Asset Problem And The String Of Pearls [View article]
" And that's not unique to BMS". - I agree. Every company on that list has its own share of spin-off's, sell-offs, acquisitions and so on. Pfizer has bought and sold so many things, Merck spun of Medco in 2003 reducing its revenues in half. ( Medco had 757 million worth of Properties in 2003). But still they both increased their Asset value over time like most companies in the list. So its easy to expect Assets to go up and down year on year depending on your buy and sell. But what you want to see is Assets growing slowly along with revenue. That's why I used ten years worth of data, to remove the short term up and down movement and I kept the data standard across all companies by not factoring in the buys and sells for anyone. Same rule for all companies.
But I do expect BMS to start investing in assets very soon if not already!
Pfizer Repositions Itself To Stay On Top [View article]
LoL. Just love the way you phrased your question. Pfizer actually has lots of litigation going on right now. Product litigation runs for six pages in the annual report and definitely some of them are going to cost them heavily.
Pfizer has 87 projects in its pipeline, more than most of the drug majors. Phase 1 - 27, Phase 2- 30, Phase 3- 19, Registration - 11. Just two days back FDA extended its review of Pfizer's Tofacitinib, a arthritis drug. If approved the drug may bring in few billions in annual sales.
Gold And S&P 500: A Portfolio For All Markets [View article]
Thanks for your Comments remurraymd. I think writing options is a great idea to increase the returns of the portfolio.
If you ever want to take some money out of your portfolio to invest in a new stock or a bond, do you sell a particular stock or you sell uniformly across the board?
Gold And S&P 500: A Portfolio For All Markets [View article]
Agree mhench. My risk appetite is a bit lower and I will be worried if gold starts eating into the gains once the bull market is over. If I have equal number of SPY and GLD I believe I will get decent returns in the longer run and some losses every now and then. As I am only planning to use this investment to buy stocks I think I will be ok with less returns.
Is It Time To Buy Teva? [View article]
I am starting to love seekingalpha!!
Is It Time To Buy Teva? [View article]
I don't mind adding another column with margins but what margin will be correct. Once again the question of the margin used is too high and too low will come into the picture.
Is It Time To Buy Teva? [View article]
Is It Time To Buy Teva? [View article]
I read a lot about Copaxone expiry affecting the company and why Teva is falling because of that. Just wanted to find out if its a reasonable assumption. I know I sort of did a worst case analysis to see what happens if Copaxone sales drops to zero today ( we know its not going to happen). Result - 16 times earnings after subjecting valuation to a worst possible outcome.
I think Teva is suffering from a Patent Cliff Syndrome.
With regard to the CEO part, I think there is some amount of pessimism in the market with respect to Teva and he is carrying the bulk of it. May be he paid a bit extra to buy those companies but acquisitions are never easy.
Is It Time To Buy Teva? [View article]
Do you know any other company that has substantial manufacturing facilities located in Israel? Just to check how other stocks are doing and compare them.
Is It Time To Buy Teva? [View article]
"Our executive offices and a substantial percentage of our manufacturing capabilities are located in Israel. Our Israeli operations are dependent upon materials imported from outside Israel. We also export significant amounts of products from Israel. Accordingly, our operations could be materially and adversely affected by acts of terrorism or if major hostilities were to occur in the Middle East or trade between Israel and its present trading
partners were curtailed, including as a result of acts of terrorism in the U.S. or elsewhere. " ( Teva Annual Report 2011 - Page 14)
Is It Time To Buy Teva? [View article]
Teva investor relations link with EPS data http://bit.ly/OKTNzG
Generic Pharma Companies To Watch [View article]
Decoding Emerging Pharma Markets [View article]
Bristol-Myers Squibb: The Asset Problem And The String Of Pearls [View article]
So its easy to expect Assets to go up and down year on year depending on your buy and sell. But what you want to see is Assets growing slowly along with revenue. That's why I used ten years worth of data, to remove the short term up and down movement and I kept the data standard across all companies by not factoring in the buys and sells for anyone. Same rule for all companies.
But I do expect BMS to start investing in assets very soon if not already!
You can have a look at the following chart. it might help you.
http://seekingalpha.co...
Anyways, what I expressed here is just my opinion, not a buy or sell rating on the stock. Thanks.
Pfizer Repositions Itself To Stay On Top [View article]
Pfizer has 87 projects in its pipeline, more than most of the drug majors. Phase 1 - 27, Phase 2- 30, Phase 3- 19, Registration - 11. Just two days back FDA extended its review of Pfizer's Tofacitinib, a arthritis drug. If approved the drug may bring in few billions in annual sales.
Gold And S&P 500: A Portfolio For All Markets [View article]
If you ever want to take some money out of your portfolio to invest in a new stock or a bond, do you sell a particular stock or you sell uniformly across the board?
Gold And S&P 500: A Portfolio For All Markets [View article]
Gold And S&P 500: A Portfolio For All Markets [View article]
Gold And S&P 500: A Portfolio For All Markets [View article]