Analysts Tout Generic Drugs as Growth Stocks

By Wiggins, Phillip H. | THE JOURNAL RECORD, June 27, 1989 | Go to article overview

Analysts Tout Generic Drugs as Growth Stocks


Wiggins, Phillip H., THE JOURNAL RECORD


Many generic drug stocks have captured the attention of analysts who believe the group is significantly undervalued despite its buoyant earnings prospects.

Analysts point out that generics, which are copies of brand-name drugs and sell at significant discounts, are experiencing a 15 to 20 percent average growth rate in earnings while the overall economy is expected to expand by only 2 to 3 percent this year. Because of the rapid earnings momentum of generics, many experts believe they should be viewed as growth stocks and command high market multiples.

The group also has been helped by growing customer acceptance of generic drugs, by patent expirations and by efforts to control health-care costs.

A.L. Laboratories of Fort Lee, N.J., is one of the higher-quality, undervalued producers of generics, said Jerry Treppel, a pharmaceuticals analyst for Swergold, Chefitz Inc.

With a commanding 40 percent market share of the liquid generic drug market, A.L. Labs, through its Barre-National Inc. subsidiary, is the nation's largest manufacturer in this sector.

Analysts note that this is the fastest-growing generic area, helped by the increasing use of liquid medications by the elderly.

According to some analysts, A.L. Laboratories' other businesses, including animal health and international pharmaceuticals operations, provide a level of stability and predictability to earnings that many generic drug companies lack.

Treppel ranks the stock as ``accumulate.'' He estimates that A.L. Labs will earn about $1.05 a share in 1989, up almost 20 percent from 87 cents in 1988.

The stock closed unchanged Tuesday, at $16.375, on the New York Stock Exchange.

The Bolar Pharmaceuticals Co. in Copiague, N.Y., has strong niche positions in the tablet and capsule market, enabling it to avoid much of the pricing competition characteristic of the generic drug group.

Bolar's generic form of Dyazide, an anti-hypertension drug produced by SmithKline Beckman, is considered crucial to Bolar's earnings growth in 1989.

Stuart Levine, who follows Bolar for Gruntal & Co., has raised his 1989 per-share earnings estimate for the drug maker to the $1.70 to $1.75 range. The company earned $1.51 a share in 1988.

Levine said that one reason he is looking more favorably on Bolar is because it ``is on the road to establishing its own proprietary products. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Analysts Tout Generic Drugs as Growth Stocks
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.