Don't Fold Your Bets On Teva

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About: Teva Pharmaceutical Industries Limited (TEVA), Includes: BRK.A, BRK.B, GILD
by: Motek Moyen
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Motek Moyen
Event-driven, tech, value, momentum
Summary

Compared to its pharmaceutical peers, TEVA is now very undervalued. I’m therefore endorsing it as a buy.

Teva’s decision to walk away from negotiations with U.S. federal prosecutors over price-fixing charges could worsen the stock’s 5-year price return of -80.41%.

Teva’s act is not out of obstinacy. It’s a well-calculated gambit. Pres. Trump is now taking hydroxychloroquine as his anti-COVID-19 preventive medicine.

Teva donated millions of hydroxychloroquine doses to many countries including the United States. It is unlikely that U.S. federal prosecutors will go after Teva this year.

Better go long on TEVA now. The company’s roster of anti-psychotic drugs could get a sales boost from quarantine rules around the world.

TEVA Pharmaceuticals (TEVA) exudes deep-value aura because it only trades at 0.76x TTM Price/Sales and 0.97x TTM Price/Book valuation multiples. These multiples are patently low when compared to Gilead's (GILD) 4.09x