The most successful investors of all time, Warren Buffet has bought stake in the Israeli-based Teva Pharmaceutical Industries. Teva is world’s largest generic pharma company. Warren Buffet, through Berkshire Hathway, has bought 18.9 million shares in Teva, which works out to be ~2% stake valued at $365.3mn.
Berkshire, along with J.P. Morgan and Amazon, had announced in the last month that they were planning to start their own healthcare company and the goal is to make drugs more affordable for their employees.
Warren Buffet is well known for his investment principles and his method of intrinsic value investing. Buffet buying stake in Teva could signal that the pharma companies probably have more intrinsic value that is perceived by the market. His principle of buying the business and holding for the long term is well known and this latest bet on Teva is likely to be seen positively for generic pharma companies.
Indian pharma sector, which is a global generic powerhouse with the companies like Sun Pharma, Lupin, Cipla, Dr. Reddy's, etc. The sector is likely to remain in highlight as these companies too have seen decline in their share price and this news can lift up the spirit of the shareholders.