What do Teva investors want from their new CEO?
|Jeremy Levin, Teva CEO.--courtesy of Teva Pharmaceutical Industries|
Teva ($TEVA) investors are waiting for a word from CEO Jeremy Levin. But not just any word. As Reuters reports today, the company's long-suffering shareholders want a little love from their new chief.
"The most important signal (shareholders) need to hear on the record from Levin is 'whatever it takes I will protect you'," RCM Capital Management's Dan Hunt told the news service.
As Hunt points out, Teva hasn't done much for its shareholders lately. For 2012, it was one of the pharma industry's worst-performing stocks, falling 7.87% to $39.71 in late November from $43.10 at the new year. (It's recovered somewhat since, closing at $41.48 yesterday.) But investors haven't been happy with the company for several years, as former CEO Shlomo Yanai went long on promises and fell short on delivery. As Reuters points out, Teva shares are down 35% from their 2010 peak of about $64.
Levin recently said Teva would slash $1.5 billion to $2 billion in costs, a move investors appeared to like; the stock has been on a mostly upward trajectory over the past week. But cutting costs isn't a bold or original decision, though it may be necessary.
Hunt's point, however, is that originality isn't the most important thing here. As Victory Capital Management analyst Robert Caravella told Reuters, investors really want the basics. What's Levin's "estimate of what a reasonable growth rate is going forward?" he said, adding, "The biggest issue is there's not an understanding of where revenue and earnings are going to go and how we're going to get to that point."
- read the Reuters story
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