I want to like the stock of Teva Pharmaceuticals. They trade at a reasonable multiple of free cash flow and earnings. They have managed to continue growing when other pharmaceutical companies have stumbled and are still growing. My issue with Teva is that they don't return any cash to shareholders except for a token dividend and are on a perpetual buyout binge.
With the company trading at less than ten times 2011 estimates what better use of cash than buying back their own stock? Why take the risk of M&A when there is easy money sitting on the table? The stock is cheap enough that I am considering a modest long at current levels. If Teva ever gets serious about returning cash to shareholders I would be an aggressive buyer of the stock at these levels.