Teva Pharmaceutical Industries
A second no-brainer stock that's begging to be bought with $600 right now is brand-name and generic-dr-g developer Teva Pharmaceutical Industries (TEVA 1.51%).
The previous seven years have not been easy for Teva or its shareholders. The company buried itself in debt by overpaying for generic-dr-g maker Actavis, dealt with the loss of exclusivity on blockbuster multiple sclerosis dr-g Copaxone, and has worked its way through a litany of litigation concerning its role in the opi--d crisis. Suffice it to say, there have been viable reasons why Teva stock has been clobbered.
The good news for current and prospective investors is that many of these gray clouds have cleared. In particular, the company forged a $4.25 billion opi--d settlement with 48 U.S. states last year. Teva will pay this sum over 13 years, with up to $1.2 billion of this total coming from the delivery of overdose-reversal dr-g Narcan.
One of the keys to Teva's multiyear turnaround efforts has been its ability to cut its expenses and de-lever its balance sheet. Under prior CEO Kare Schultz, the company disposed of noncore assets and shed north of $3 billion in annual operating expenses.
Current CEO Richard Francis is continuing this trend. Teva's intended divestiture of its active pharmaceutical ingredient (API) segment will free up capital, hone its operating focus, and allow it to further reduce its net debt. Since closing the Actavis deal in August 2016, Teva's net debt has declined from around $35 billion to a more manageable $16.6 billion, as of Dec. 31, 2023.
The other key to Teva's success is its operating transformation that devotes more of its research and capital to novel therapeutics. Although brand-name dr-gs have finite periods of sales exclusivity, the growth rates and margins associated with them are considerably higher than generic dr-gs. Novel therapies like tardive dyskinesia dr-g Austedo, which is on pace for $1.5 billion in sales this year after recording $1.23 billion in sales in 2023, should help fuel Teva's growth.
Considering that Teva's sales are expected to expand in 2025 and beyond, a forward price-to-earnings (P/E) ratio of 5 is nothing short of a bargain.
https://www.fool.com/investing/2024/04/03/3-no-brainer-stocks-to-buy-with-600-right-now/