Teva Pharmaceutical Option Trader Sees More Upside Later This Year (TEVA)

Notes: Today, someone sold their 4,000 (TEVA) Mar 20 $52.50 calls for $4.05 each (21% gain from their $3.35 entry) and moved into 6,000 Jan 2016 $45/$60 bull risk reversals for a $2.90 debit (bought the $60 calls and sold the $45 puts). Option activity was nearly 3x the average daily volume (typically trades 8,662 contracts total). Prior to this trade, Teva Pharmaceuticals announced that they were selling ANDA (Flecainide Acetate tablets USP 50mg, 100mg and 150mg) to ANI Pharmaceuticals and that they will be presenting at the Barclays Global Healthcare Conference on March 12th. Also, on March 2nd, Teva agreed to sell their Sellersville, PA facility to G&W Laboratories as part of a cost cutting effort. The $54B generic drug maker trades at a P/E ratio of 10.99x (2015 estimates), P/S ratio of 2.38x, and a P/B ratio of 2.07x. Alone with a 2.40% dividend yield, shares have an average analyst price target of $62.19 (23 analysts).

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