The bear market created exceptional value in out-of-favor companies. Investors who are patient enough to
wait for them to turn around could realize gains in the next few years. There are three companies to
consider.
Teva Pharmaceutical (TEVA) broke its uptrend that began in Sept. 2022. The drug firm, which relies on
generic drug sales, posted revenue of $3.6 billion. It earned 59 cents (non-GAAP. For 2022, it expects
EPS of up to $2.60.
Teva has legal overhangs from the opioid settlement. At a forward P/E of around 3 times, the market is
too harsh on TEVA stock.
Consumer goods firm Newell Brands (NWL) earned 53 cents a share in Q3/22. Revenue fell by 17.6% to
$2.3 billion. Markets are expecting that consumer spending will fall further. The stock is pricing business
volatility for 2023.
Media firm Warner Bros. Discovery (WBD) posted a 95-cent loss. Revenue fell by 10.6% Y/Y to $9.82
billion. The firm reported total direct-to-consumer subscribers rising by 2.8 million, to 94.9 million.
Investors do not care about subscription growth. The global DTC ARPU of $7.52 is very low. Still, WBD
reduced its debt by over $2.5 billion. It still has around $50 billion in debt. Since interest rates keep rising,
markets are discounting the higher costs of managing their debt.
Warner Bros. Discovery is a good restructuring post-merger speculation.