Unsafe At Current Price? – Teva Pharmaceutical Industries Limited (TEVA), Albemarle Corporation (ALB)

Teva Pharmaceutical Industries Limited (NYSE: TEVA) shares are -3.16% down in the year-to-date (YTD) period and have moved -3.85% or -$0.38 lower in the latest trading session. However, stock’s trailing 12-month performance remains nearly +51.84% lower. Comparatively, the stock is -31.03% down YTD and -26.32% over the trailing 3-month period. If we look at the shorter duration, its week performance is -0.52% and -22.15% over the month.

Analyst Recommendations

On July 27, 2020, Goldman recommended the TEVA stock is a Neutral, while earlier, Barclays had Upgrade the stock as a Equal Weight on August 06, 2020. 23 analysts offering the recommendations for the stock have a consensus rating of 2.80 to suggest that the TEVA stock is a “Moderate Buy. 1 of the 23 analysts rate the stock as a “Sell”, while 1 has rated it as “Underweight”. 4 recommend buying, with 1 rating it as an Overweight.

The stock currently trades at $9.49 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $12.19. The forecasts give the Teva Pharmaceutical Industries Limited stock a price target range of $17.00 on the higher side while at least one analyst think the stock could plunge to a low of $8.00. The two limits represent an upside potential of 44.18% or -18.63%.

Earnings Forecast

Analysts estimate the earnings to increase 3.80% in the current quarter to $0.58, up from the $0.58 reported in the same quarter a year ago. For the current year, earnings should grow to an average of $2.51, down -1.00% from $2.4 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between $0.54 and $0.72. Wall Street estimates earnings per share to be at an average of $2.63 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 0 over the last 12 months, while SEC filings reveal that there have been 0 insider sales over the same period. Insiders have purchases 0 shares while those sold by company executives and officers stand at 0. The last 3 months have seen insiders trade a total of 0 and 0 in purchases and sales respectively.

Griffin Deborah A, a Chief Accounting Officer at the company, sold 944 shares worth $6762.0 at $7.16 per share on Mar 17. The Director had earlier sold another 2,860 TEVA shares valued at $34038.0 on Aug 11. The shares were sold at $11.90 per share. Stark David Matthew (Exec. VP Chief Legal Officer) sold 2,359 shares at $7.16 per share on Mar 17 for a total of $16899.0 while O’Grady Brendan P., (EVP, North America Commercial) sold 470 shares on Mar 17 for $3367.0 with each share fetching $7.16.

Albemarle Corporation (NYSE:ALB), on the other hand, is trading around $97.39 with a market cap of $10.22B and analyst research firms have a positive stance on its shares. Analysts predict that the stock will reach $78.66 and spell out a less modest performance – a -23.81% return. Some analysts are even forecasting $3.52 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Albemarle Corporation (ALB) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

ALB’s operating margin was positive on the trailing 12 months basis, remaining steady at 15.40%, while the operating expenses over the recent quarter were at $121.85 million. This represented a 84.05% of the company’s total revenues which amounted $764.05 million. With this in place, we can see that the company’s diluted EPS inclined $0.80 on the year-over-year period, growing to $1.45 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $10.17 billion from $9.85 billion over the previous quarter. The cash flow from operating activities totaled $207.92 million, significantly higher than the $199.29 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$211.07 million.

Insider activity

Insiders have transacted a total of 21 times at Albemarle Corporation over the last 6 months, with insider purchases undertaken 11 times and accounting for 31,581 shares. Insider sales totaled 162,773 shares over the same period, with these deals completed in 10 transactions. Looking at these numbers, we realize that net purchases over that period are 1.0 shares. Insiders now hold a total of 543.49k shares after the latest sales, with -16.50% net shares purchased.

Major holders

Insiders own 0.30% of the company shares, while shares held by institutions stand at 93.00% with a share float percentage of 105.86M. Investors are also buoyed by the number of investors in a company, with Albemarle Corporation having a total of 824 institutions that hold shares in the company. The top two institutional holders are Vanguard Group, Inc. (The) with over 12.65 million shares worth more than $976.59 million. As of Jun 29, 2020, Vanguard Group, Inc. (The) held 11.89% of shares outstanding.

The other major institutional holder is Blackrock Inc., with the investment firm holding over 7.71 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $595.6 million and represent 7.25% of shares outstanding.