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StockCentral :: Community
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Join in on the discussion with other like-minded investors in our community forums. Learn about the fundamental investing methodology and participate in educational workshops in the Investing forums, stay up-to-date on StockCentral news and make suggestions to the StockCentral team in Central Square, and discuss your favorite stock or recent market news in our A-Z ticker-based forums.
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Doug Gerlach
Cambridge, MA
http://www.iclub.com/
President, ICLUBcentral
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| 10/02/2008 12:15 PM |
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Here's my current stock study on TEVA using very conservative projected growth of 11.9%. At the current price of $46, it's barely meeting my minimum standards for consideration at that growth projection. Compared to the analysts' estimates from Zacks for this and the next fiscal years, my projection line is pretty much on track, reaching EPS of $4.13 in 5 years.
The October IAS recommended it for purchase in August 2008 at its $42.48 price, and rates it a possible buy up to $51. They used the mean analysts' estimate of EPS growth of 17% in their assessment.
Sales growth last year was just 11.9% and EPS growth was flat, though the first quarter showed growth of 24% for sales and 35% for EPS, so the company looks like it's recovering from last year. They do make 20% of US generic pharmaceuticals already, including the Ivax acquisition from a year or two ago. With revenues of $9.4 billion, they're approaching a size where growth is going to have to slow down -- though, interestingly, revenue growth had been very stable and even slightly expanding until last year.
So, is TEVA a high-quality company with good prospects for growth? Should I be worried about the $5.3 billion in debt the company is carrying? What are the other risk factors I should consider? Is 11.9% growth too low, is 17% too aggressive, where do you think growth is likely to fall?
Doug
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 Attachment: TEVA.SSG
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