Does Mylan Have Upside Potential?

With shares of Mylan (NASDAQ:MYL) trading at around $27.85, is MYL an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Mylan is in the right industry at the right time, but can Mylan hold up if there is a steep market correction ahead? We’ll get to that later. For now, let’s take a look at the impressive list of positives for Mylan:

  • Consistent revenue and EPS improvements on an annual basis
  • Global leader in generics
  • Recently launched generic version of Zovirax ointment (more on this below)
  • More than 175 pending drug applications
  • Growing presence in emerging markets
  • Highly innovative company
  • More than 1,000 products worldwide

In regards to the launch of the generic version of Zovirax, here is more information on the drug:

Treats herpes virus infections, including shingles (herpes zoster) and genital herpes (herpes simplex). Also treats chickenpox. This medicine will not cure herpes, but may prevent a breakout of herpes sores or blisters.

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As far as negatives for Mylan are concerned, they include pricing pressure and currency fluctuations.

Let’s get to some comparative numbers. The chart below compares fundamentals for Mylan, Actavis (ACT), and Teva Pharmaceuticals Industries Limited (NYSE:TEVA). Mylan has a market cap of $11.02 billion, Actavis has a market cap of $12.38 billion, and Teva has a market cap of $32.91 billion.

MYL

ACT

TEVA

Trailing   P/E

18.33

127.38

17.07

Forward   P/E

8.68

10.71

17.01

Profit   Margin

9.43%

1.65%

9.66%

ROE

18.74%

2.65%

8.45%

Operating   Cash Flow

$949.02 Million

$665.80 Million

  $4.57   Billion

Dividend   Yield

N/A

N/A

2.70%

Short   Position

8.90%

1.00%

N/A

 

Let’s take a look at some more important numbers prior to forming an opinion on this stock…

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