Since December 1990, Teva has skyrocketed from 66 cents to $44.95. Early investors in Teva have made 68 times their money. That’s better than master investor Warren Buffett (a 13x return over the same period) -or even high profile U.S.-based success stories like Starbucks (a 36x return since 1992).
Here’s why we think Teva (TEVA) — this week’s Global Bull Market Alert pick — will continue to generate big profits for investors well into 2006.
As a global generic drug maker, Teva is poised to take advantage of drugs coming off patents. Generic drugs are set to enjoy a banner year in 2006. Six blockbuster drugs with sales of more than $1 billion each are set to go off-patent in the U.S., ranging from Merck’s Zocor and Sanofi-Aventis’ Ambien to Bristol-Myers Squibb’s Pravachol and Pfizer’s Zoloft.
Just about $23 billion in products will lose exclusivity, with more than $18 billion of that coming from the U.S. With an estimated 10% share of the generic drug market, Teva will reap big profits in the next few years from this development.
Teva is also well set to take advantage of a bird-flu crisis, should one erupt. Swiss drug giant Roche, in a move to silence criticism that it’s guarding the formula for its bird-flu drug too closely, has reached agreements with Teva (as well as a handful of other drug producers) for the production of Tamiflu. That means any bad news on that front will send Teva’s stock soaring.
Finally, Teva’s stock is exhibiting all the technical characteristics we like — it is a steady performer that remains unruffled by political uncertainty in its home market of Israel.
So buy Teva at market today and place your initial stop at $39.50. If you want to play Teva’s continued upswing into 2006, buy the June $50 call options. (TVQFJ.X).
Portfolio Update — Lock in 88% Gains with Sify in One Week!
The options in last week’s Global Bull Market Alert pick, Indian internet company Sify (SIFY), skyrocketed 88%, with the stock itself up 17%. It doesn’t get much better than this, so take profits on half your options (SUYCB.X) and move your stop price to $7.90.
To make room for Teva, take profits on Norsk Hydro (NHY), where we’ve made a quick profit of close to 5%, for an annualized return of 59%.
With Japanese financial giant Mitsubishi UFJ (MTU) up sharply this week on the stronger yen, move your stop up to $12.40.
Our Global Bull Market Alert stock picks have gotten off to a strong start. All of our selections have made money, with some registering gains as high as 26%.
In addition to this week’s 88% gain in Sify, those of you who have played our option recommendations have recorded triple-digit gains in both America Movil (125%) and Elan (128%).