This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Is Mylan Cheap Yet?

At the Mylan (MYL - Get Report) annual meeting in late July, Chairman Milan Puskar had a simple message for shareholders: "Keep the faith."

In the two months before the meeting and in the four months following it, shareholders of the generic drugmaker have had their own message: "Sell the stock."

Recently, Mylan's shares have dropped to levels not seen in more than five years on a split-adjusted basis, hitting an intraday low of $12.93 on Nov. 21. It closed at $13.61 on Nov. 23, and is down 39% since early May. Earlier this month, major bond-rating firms cut their credit ratings, pushing Mylan deeper into junk-bond territory.

Mylan makes the bond guys nervous and the equity guys jittery over its $6.8 billion purchase in October of the generic-drug division of Merck KGaA, the German drug and chemical conglomerate.

Analysts like the fact that Mylan is now the world's third-largest generic-drugmaker by sales, significantly expanding its size and geographic scope to compete with industry leaders Teva Pharmaceutical Industries (TEVA - Get Report) and the Sandoz division of Novartis (NVS - Get Report).

But many also believe Mylan paid too much and assumed too much debt. They worry that Mylan lacks managerial experience for dealing with a sprawling enterprise spread over several continents.

"We see Mylan management as the key source of risk for investors," says Aaron Gal, of Sanford C. Bernstein & Co., in a recent report. "We are concerned both about the company's lack of experience in global operations and its spotty track record in driving investor returns."

Mylan has begun hiring top managers from companies with heavy international exposure, such as Pfizer (PFE - Get Report) and Sanofi-Aventis (SNY - Get Report).

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
WPI $85.73 0.00%
MYL $69.82 0.00%
NVS $102.46 0.00%
PFE $35.04 0.00%
SNY $51.68 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs