Actavis Plc. (ACT, Financial) founded in 1984 by Allen Chao and David Hsia is among the leading pharmaceutical companies in the world. The company has its administrative headquarters in New Jersey, United States and global headquarters in Dublin, Ireland with a total employee count of nearly 21,600. Actavis is a major pharmaceutical company focused on the developing, manufacturing and distributing generic and branded generic pharmaceutical products across the globe. The company became the third-largest generics pharmaceutical company following its merger with Watson Pharmaceuticals in a $5.9 billion deal. The company operates outside U.S. through Medis its third-party business which offers a broad portfolio of more than 200 generic pharmaceutical products.
Factors favoring investment
The recent acquisition of an antibiotic maker Durata Therapeutics, Forest Laboratories and Botox maker Allergan (AGN, Financial) by Actavis made the company among top ten pharmaceutical companies across the globe in terms of sales.
Actavis has an impressive recent earnings track record with an EBITDA of $464.50 million in the first quarter of 2015. The net revenue of the company rose to $4.23 billion for the first quarter this year from $2.66 billion as compared to the first quarter of last year which is an exceptional increase of 59%.The business from Allergan has contributed $228 million to the net revenues and $113 million in adjusted EBITDA in this quarter.
The company has proven trustworthy among its Investors and shareholders as it has reported an EPS of $4.30 which is higher than of $3.49 in the first quarter of 2014. At present the company also has an impressive price to equity ratio of 21.5 and an estimated forecast of 16.8 in the year 2015 indicating a positive demand from the investors.
Cash flow analysis
The annual capital expenditures dropped to $274.70 million in 2014 as compared to $307.90 million in 2013. On the other hand, the annual cash flow from operations has risen to $2.24 billion in the year 2014 from $ 1.21 billion in 2013.The cash and marketable securities were valued at $2.13 billion as of March 31, 2015. This data suggests that Actavis has had an exceptional Operational performance in the recent years along with a series of acquisitions.
Performance among competitors
Actavis is looking promising in terms of returns as compared to its competitors Teva Pharmaceutical Indus (TEVA, Financial) and Mylan (MYL, Financial) both of which are pharmaceutical giants. Teva pharmaceuticals Indus is a leading generic pharmaceutical company with headquarters in Israel and Mylan is global generic pharmaceutical company with its headquarters in United Kingdom.
The three year return rate of Actavis is 324.4% as compared to 69.39% of Teva pharmaceuticals Indus and 227.5% of Mylan. The market Capital of Actavis is $118.36 billion as compared to $51.77 billion of Teva pharmaceuticals Indus and $34.14 billion of Mylan. This looks positive and promising in terms of investing as compared to its global competitors.
Conclusion
The Actavis Company under its CEO Brent Saunders has demonstrated an exceptional operational performance in the recent years which also includes a series of acquisitions. The results of first quarter performance report and Allergan acquisition in March 2015 supports this claim. The company now with a combined team is focusing on achieving a market share of about 80% of the estimated $1.8 billion in synergies by the end of the first quarter of 2016. The company is also prepared to invest heavily in research and development activities and driving double digit sales growth and thus looks promising in terms of long-term investing.
