Looking for a deal? TEVA Pharmaceuticals, symbol TEVA, has nothing but trouble and their stock price reflects that trouble.
They are a provider of generic pharmaceuticals and competition is eating their lunch. TEVA cut their dividend and is soul searching for an answer. Debt has soared to a debt to equity ratio of 1.25 (source ycharts.) They still do a lot business and if you think they are not going out of business and that their stock price is about as low as it will go, here is a series of call options to consider.
I find the October 27 call which is only 23 days away as the most enticing. A 3.24% yield on my basis and a total return of 9% should the stock be called away is hard to find. I don't trust TEVA enough to go out to December where the call yield is 5.6% and the return if called away is nearly 15%.
This is not for the faint of heart but once in a while, bad news can provide a trading opportunity. I repeat this is a trading opportunity rather than an investment.
M* MoneyMadam
Disclosure: Long TEVA
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They are a provider of generic pharmaceuticals and competition is eating their lunch. TEVA cut their dividend and is soul searching for an answer. Debt has soared to a debt to equity ratio of 1.25 (source ycharts.) They still do a lot business and if you think they are not going out of business and that their stock price is about as low as it will go, here is a series of call options to consider.
I find the October 27 call which is only 23 days away as the most enticing. A 3.24% yield on my basis and a total return of 9% should the stock be called away is hard to find. I don't trust TEVA enough to go out to December where the call yield is 5.6% and the return if called away is nearly 15%.
This is not for the faint of heart but once in a while, bad news can provide a trading opportunity. I repeat this is a trading opportunity rather than an investment.
M* MoneyMadam
Disclosure: Long TEVA
