Portfolio Review – Healthcare – Actavis
The Schwab Profile – Actavis (ACT) (price of stock is $296.54 as of 6/9/15) is a global, integrated specialty pharmaceutical company. The Company focuses on developing, manufacturing and distributing generic, brand and biosimilar products. The Company produces and markets generic, branded generic, branded and over-the-counter (OTC) pharmaceutical products covering all therapeutic classes. The Company’s product formulations include modified release, solid oral dosage, semi solids, suspensions, transdermals, suppositories, creams, ointments, liquids and injectables. In July 2014, the Company acquired Forrest Laboratories Inc. In July 2014 the Company acquired Furiex Pharmaceuticals Inc. in July 2014, Impax Laboratories Inc acquired from Actavis Plc two generic products.
P/E: – –
Forward P/E: 16.54
PEG: – –
Annual Dividend: – –
MorningStar Report – 6/8/15
– Through acquisitions, Actavis has transformed into a globally diversified drug manufacturer with considerable economies of skill, patent protected products, and a healthy pipeline.
– Botox continues to dominate the neuromodulator market with almost 76% market share. Few competitors will match Actavis’ product portfolio scope, brand recognition, and loyalty programs in the cosmetic market, and recent therapeutic indications introduce Botox to new areas.
– Actavis’ drug pipeline of biosimilars, generic Advair and assets inherited from Allergan create potentially large growth opportunities.
– Much of Actavis’ future growth depends on the success of products in development, but some high risk of products have faced developmental challenges, such as the anti-VEGF DARPin currently in Phase II clinical trials.
– With the majority of generics drug sales based in the US, Actavis faces a big hurdle after the patent cliff, when the value of patent expirations substantially diminished.
– Actavis’ specialty branded drug franchises in women’s health, urology, gastrointestinal, and central nervous system markets face high levels of the generic competition, which erodes pricing power.
– MorningStar fair value estimate: $330.
Argus Rating Report – 5/15/15
– Buy Rating with a price target of $340.
– Five Year Growth Rate: 15%
– Current FY P/E: 16.7
– Net Margin: -15.3
– One Year EPS Growth: 18%
Market Edge (Technicals) – 5/15/15
– Neutral from Avoid with a score of 2.
– Stock shows mildly improving conditions.
Yahoo Finance Recommendation Summary
– 1.7 (Strong Buy 1.0 – 5.0 Sell)