NEW YORK (TheStreet) -- Shares of Mylan (MYL) - Get Report were falling 5.4% to $58.33 Monday after the drug manufacturer announced a second public offering of shares held by Abbott Laboratories (ABT) - Get Report.
Mylan announced that certain subsidiaries of Abbott Laboratories will sell 35 million shares in the secondary public offering. The underwriters of the offering will have a 30-day option to buy up to 5.25 million additional shares.
The 35 million shares represent 31.8% of the 110 million shares of Mylan that Abbott Laboratories owns. If the option is exercised in full the 40.25 million shares will represent 36.6% of Abbott Laboratories' stake in Mylan.
Mylan will not receive any proceeds from the secondary offering as it is not offering any shares. The company has not yet announced the pricing of the shares available in the offering.
TheStreet Ratings team rates MYLAN NV as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MYLAN NV (MYL) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, reasonable valuation levels, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 8.2%. Since the same quarter one year prior, revenues rose by 15.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 25.87% over the past year, a rise that has exceeded that of the S&P 500 Index. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Pharmaceuticals industry and the overall market, MYLAN NV's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The net income growth from the same quarter one year ago has significantly exceeded that of the Pharmaceuticals industry average, but is less than that of the S&P 500. The net income increased by 5.0% when compared to the same quarter one year prior, going from $180.23 million to $189.20 million.
- You can view the full analysis from the report here: MYL Ratings Report