Today’s new recommendation comes from Dow Theory Forecasts.
“We are initiating coverage of Mylan, Inc. (MYL, $26), a maker of generic drugs, as a Buy and Long-Term Buy. The stock has a lot to like, including improving cash flow and profit margins, strong profit momentum with positive earnings revisions and solid Quadrix scores.
“Mylan boasts a portfolio of more than 1,100 generic drugs, as well as several branded medications. In addition, a subsidiary is one of the world’s largest makers of drug ingredients.
“Shares have returned 21% this year but still seem unduly cheap considering the company’s growth outlook. For 2012, rising analyst estimates target per-share earnings of $2.58, implying 26% growth. For 2013, the consensus is $2.77, up 7%. Yet shares look undervalued at 10 times trailing earnings — a 46% discount to the three-year average. Helped by a Quadrix Value score of 70, the stock’s Overall score is 93.”
- Richard J. Moroney, Dow Theory Forecasts, November 26, 2012