What would the value of this stock be in 3 years if management meets its goals?
After the acquisition, the total revenue would be around $4.5B, which in 3 years at a conservative organic growth of 10% would be at $6B.
Market cap today is 2x revenue. Using the same multiple it would be $12B. In 3 years time the loan could be paid off although there will be higher number of shares outstanding - around 410 million. That values this stock at $29 in 2010. That would be a 35% annual return for a long term investor that buys today at 14. I have a small position at $18 and am contemplating doubling down.
Nice to see someone else with a long-term time horizon. If only the street were that smart.
I believe $29 is about as conservative as it gets in 2010. Imagine what will happen if MYL starts to deliver 30-35% earnings growth as RC mentioned. The entire generic industry gets no credit/respect from the street right now...that will change in 12-18 months. Due to the Clinton Foundation's work with MYL, don't be shocked to see Hillary mention generics in a big way during the 2008 campaign run.
If only the street were that smart. Depends on your view of smart. If I buy 1000 shares at 14s and sell in 16s 4 times a year. At the end of 2010 I have made 24000.00. If it goes as you think I can move up as it does. 16s-18 18s-20s. Since 2001 would you have been better off trading or holding? To each his own. Good luck and good trading$$$