Regulatory Shake-Up Led to the Sell Off in Teva Pharmaceutical Industries Limited (TEVA)
Sound Shore Management, an investment management firm, has released its investor letter for the first quarter of 2025. A copy of the letter can be downloaded here. The fund's Investor Class (SSHFX) and Institutional Class (SSHVX) declined 1.93% and 1.89% respectively, in the first quarter of 2025 compared to a 2.14% return for the Russell 1000 Value Index (Russell Value) and -4.27% return for the Standard & Poor 500 Index (S&P 500). Sound Shore's 35-year annualized returns were 10.13% and 10.41% for SSHFX and SSHVX, respectively, as of March 31, 2025, and were ahead of the Russell Value at 9.81% and trailed the S&P 500 at 10.56%. In addition, please check the fund's top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Sound Shore Management highlighted stocks such as Teva Pharmaceutical Industries Limited (NYSE:TEVA). Headquartered in Tel Aviv, Israel, Teva Pharmaceutical Industries Limited (NYSE:TEVA) engages in the development and distribution of generic and other medicines and biopharmaceutical products. The one-month return of Teva Pharmaceutical Industries Limited (NYSE:TEVA) was 14.06%, and its shares gained 2.17% of their value over the last 52 weeks. On May 23, 2025, Teva Pharmaceutical Industries Limited (NYSE:TEVA) stock closed at $16.96 per share with a market capitalization of $19.45 billion.
Sound Shore Management stated the following regarding Teva Pharmaceutical Industries Limited (NYSE:TEVA) in its Q1 2025 investor letter:
"Some of our holdings were disproportionally impacted. For example, certain parts of health care sold off on possible regulatory changes, and one of our best contributors from 2024, Teva Pharmaceutical Industries Limited (NYSE:TEVA), was not immune. Teva develops, manufactures and markets generic and specialty drugs focused on neurological and respiratory diseases. Following a period of poor capital allocation decisions by prior management teams, in 2023 we were able to invest at a very attractive 4 times earnings and with a 20%+ free cash flow yield. New leadership has focused on execution and pipeline development, leading to upward inflection in margins and positive clinical trial results. Teva remains remarkably cheap and we added to our position on recent price weakness."
A close-up shot of various types of medicines on a table, illustrating the specialty and generic products offered by the pharmaceutical company.
Teva Pharmaceutical Industries Limited (NYSE:TEVA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 64 hedge fund portfolios held Teva Pharmaceutical Industries Limited (NYSE:TEVA) at the end of the first quarter which was 72 in the previous quarter. In Q1 2025, Teva Pharmaceutical Industries Limited (NYSE:TEVA) reported revenue of $3.9 billion, representing an increase of 2% in U.S. dollars. While we acknowledge the potential of Teva Pharmaceutical Industries Limited (NYSE:TEVA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered Teva Pharmaceutical Industries Limited (NYSE:TEVA) and shared the list of best affordable stocks under $20 to buy. Sound Shore Management emphasized Teva Pharmaceutical Industries Limited (NYSE:TEVA) as a promising investment opportunity in it Q4 2024 investor letter. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
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