Why a $34 Million Teva Stock Position Signals Confidence in a Long Repair Story

Prague-based Pale Fire Capital SE increased its stake in Teva (NYSE:TEVA) by 639,162 shares during the third quarter, adding approximately $16.53 million in value as disclosed in its November 13 SEC filing.

What Happened

Pale Fire Capital SE disclosed in a November 13 SEC filing that it increased its holding in Teva (NYSE:TEVA) by 639,162 shares during the third quarter. The post-transaction holding reached nearly 1.7 million shares valued at $34.13 million as of September 30.

What Else to Know

Teva now represents 3.74% of Pale Fire Capital SE’s 13F assets.

Top holdings after the filing:

• NYSEMKT: BTG: $247.58 million (27.1% of AUM)
• NASDAQ: GRPN: $237.73 million (26.1% of AUM)
• NYSE: DOLE: $115.42 million (12.7% of AUM)
• NYSE: IAG: $50.83 million (5.6% of AUM)
• NYSEMKT: NGD: $44.60 million (4.9% of AUM)

As of Friday, Teva shares were priced at $31.89, up 41% over the past year and well outperforming the S&P 500, which is up about 15% in the same period.

Company Overview

Company Snapshot

• Teva offers a broad portfolio of generic medicines, specialty pharmaceuticals, and biopharmaceutical products, including treatments for central nervous system disorders, respiratory diseases, oncology, and pain management.
• The company operates a diversified business model focused on developing, manufacturing, and distributing pharmaceuticals globally, with revenue generated from both generic and specialty drug sales.
• It serves healthcare providers, hospitals, pharmacies, and wholesalers in North America, Europe, and international markets.

Teva is a leading global pharmaceutical company specializing in generic and specialty medicines. With a strong presence in multiple therapeutic areas and a broad international footprint, the company leverages its scale and research capabilities to deliver affordable healthcare solutions. Teva's diversified product base and established distribution channels provide a competitive advantage in serving the needs of healthcare systems worldwide.

Foolish Take

After crashing as much as 90% or so, Teva is no longer priced like a broken pharmaceutical giant, but it is still trading at a steep discount to its own past, with shares roughly 55% below their 2015 highs even after a strong year. That gap is the opportunity long-term investors might be willing to fill. Operationally, the story has stabilized. Teva’s third-quarter results showed continued progress on margins and cash generation, supported by cost discipline and steady demand across its generic and specialty portfolio. Net debt has come down materially over the past few years, easing the balance-sheet pressure that once defined the bear case.

As part of the broader portfolio, this position sits alongside holdings in gold miners, consumer turnarounds, and deeply discounted global equities, suggesting a portfolio built around recovery narratives rather than momentum chasing. Teva fits that mold precisely. Ultimately, it appears this is not a bet on explosive growth, but on durability and re-rating. If Teva can keep executing and defending cash flows, today’s valuation may still understate what a repaired pharmaceutical incumbent is worth over a full cycle.

Glossary

13F reportable assets: Assets disclosed by institutional investment managers in quarterly SEC Form 13F filings.
Assets under management (AUM): The total market value of investments managed by a fund or firm on behalf of clients.
Post-trade position: The number of shares or value of a holding after a transaction has been completed.
Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.
Forward P/E ratio: A valuation metric comparing a company's current share price to its projected earnings per share over the next year.
EV/EBITDA: A financial ratio comparing a company's enterprise value to its earnings before interest, taxes, depreciation, and amortization.
Generic medicines: Pharmaceuticals that are equivalent to brand-name drugs but sold under their chemical name, usually at lower prices.
Specialty pharmaceuticals: High-cost, complex drugs often used to treat chronic or rare conditions, requiring special handling or administration.
Biopharmaceutical products: Medicines produced using living organisms or biological processes, often including advanced therapies like biologics.
Diversified business model: A strategy where a company operates in multiple products, services, or markets to reduce risk.
Distribution channels: The pathways through which products are delivered from manufacturers to end customers, such as wholesalers or pharmacies.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends B2Gold. The Motley Fool has a disclosure policy.