Teva
Pharmaceutical Industries Limited (TEVA) is a pharmaceutical company.
The Company is engaged in developing, producing and marketing generic
medicines and a portfolio of specialty medicines.
Yesterday
TEVA reported second quarter 2017 financial reports, lowered the 2017
business outlook and announced second quarter 2017 dividend of 8.5
cents, down 75% from 34 cents in the first quarter of 2017. Because
of the negative news the share price of TEVA presented a huge
decline, and it closed on $23.75 (-24.00%).
As
I saw this decline of the share price, I decided to buy a few shares
of TEVA and I successfully bought it at $23.97.
The
company has 224.06 P/E ratio, but the forward P/E ratio is 5.05. TEVA
has 0.76 Altman Z-Score, which means that it is in Distress Zone. The
Debt/Equity ratio stands at 1.14, but most of them are long-term
debt. (LT Debt/Equity: 1.08) I understand that the most of the
investors don't like the dividend cut, but I think that the dividend
cut will help the company to decrease the debt pile. I know that it
is a very risky investment, but I believe that the company worth
more.
Full
disclosure: Long TEVA.
Related
Posts:
Nice pick up. Happy to see that I'm not alone in trying to go long TEVA. It's definitely in distress mode but cutting the dividend was a great first step in stemming the bleeding and managing their huge debt. Nice pick up!
ReplyDeleteThank you! Unfortunately my timing was not good, but I not believe in the market timing, so I don't try to figure out the short term price movements.
ReplyDelete