Bloomberg News

Perrigo Discount to Tel Aviv Widens on Sales: Israel Overnight

August 17, 2013

Perrigo Co. plunged the most since November in New York to trade at the widest discount to its Tel Aviv shares among dually-listed companies after reporting revenue that missed analysts’ estimates.

Shares of Allegan, Michigan-based Perrigo tumbled 6.5 percent to $120 last week, the most since November 2012 (PRGO:US), to trade 3.2 percent below its stock in Tel Aviv. The Bloomberg Israel-US Equity Index of the most-traded Israeli stocks in New York dropped a second week, led by Syneron Medical Ltd. (ELOS:US), which plunged 8 percent. Alvarion Ltd. (ALVR:US), an Israeli maker of wireless communication equipment, soared 173 percent for the week after Globes said a private-equity firm may acquire the company.

Perrigo, which entered Tel Aviv’s TA-25 Index after buying B’nei Brak, Israel-based Agis Industries Ltd. in 2005, reported sales that missed estimates by 3.2 percent. Last week’s selloff sent the stock’s valuation (PRGO:US) to 18 times estimated earnings, the cheapest since June, according to data compiled by Bloomberg.

“The consumer health revenue has been an ongoing challenge,” Randal Stanicky, an analyst at Canaccord Genuity Inc., who rates the shares buy, said by phone from New York Aug. 16. “We think there’s upside, but given some investor skepticism, you could see the stock take a pause here.”

Perrigo slumped for six consecutive days in New York, trimming this year’s rally to 15 percent. While analysts (PRGO:US) see the stock climbing by an average 15 percent in the next 12 months, earnings estimates (PRGO:US) for the current quarter were cut by about 6 percent since Aug. 11, data compiled by Bloomberg show.

Health Care

While “we still don’t feel great” about the results, specifically consumer health revenue, lowered expectations should help the stock, Stanicky wrote in an Aug. 16 note to clients. The division made up 57 percent (PRGO:US) of its revenue in 2012.

The maker of over-the-counter medicines said July 29 it agreed to buy Irish drug company Elan Corp. for $8.6 billion. The purchase allows Perrigo to move its domicile to Ireland, gaining a low-tax base for international expansion.

The deal “puts the company in a very interesting position to expand its presence internationally,” Ami Fadia, an analyst at UBS AG, who rates Perrigo buy, said by phone from New York on Aug. 16. “I do see it as a buying opportunity.”

The Bloomberg Israel-US measure was little changed for the week at 97.33. The TA-25 Index rose 0.2 percent to 1,204.89, snapping a two-week decline.

Syneron, the maker of skin treatment devices, plunged to a one-month low of $8.45 in New York. The Yokneam Illit, Israel-based company reported sales (ELOS:US) that missed analysts’ estimates for the first time in three quarters.

Given Imaging

Given Imaging surged 8.1 percent to $17.95, capping a three-week rally. Chief Executive Officer Homi Shamir told Bloomberg News that he expects U.S. regulators to approve the capsule-sized camera to examine the colon by end of year following the Aug. 13 ruling on the small bowel.

Alvarion soared to 51 cents. Daily Globes reported Aug. 14 that private-equity firm Sigma Wave Ltd. is interested in buying the company. Alon Fishman, an adviser at Sigma, said the firm is in negotiations to acquire Alvarion.

To contact the reporter on this story: Jessica Summers in New York at jsummers17@bloomberg.net

To contact the editor responsible for this story: Tal Barak Harif at tbarak@bloomberg.net


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Companies Mentioned

  • PRGO
    (Perrigo Co PLC)
    • $153.84 USD
    • -1.15
    • -0.75%
  • ELOS
    (Syneron Medical Ltd)
    • $9.88 USD
    • -0.05
    • -0.51%
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