The Motley Fool: Even With Growth Opportunities Ahead, Is Hospira Overvalued?

Leading specialty injectables and infusion pump manufacturer Hospira (NYSE: HSP  ) has suffered greatly from largely self-inflicted wounds over the past couple of years. A lackadaisical approach to proper plant management has led to numerous FDA warning letters at key plants and a shipment freeze on the company's pumps. Yet, Hospira remains the largest player in an industry that has attractive gross margins, significant barriers to entry, and frequent supply shortages.

Hospira seems to be on the road back, and seems to be taking seriously both the need to comply with the FDA regulations and the need to augment its long-term growth potential. The problem is that it looks like Wall Street is already many steps down that road in terms of rewarding the company with a robust valuation.

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Even With Growth Opportunities Ahead, Is Hospira Overvalued?

Seeking Alpha: Hikma Has Strong Growth Potential, But High Expectations

Anglo-Jordanian Hikma Pharmaceuticals plc (OTCPK:HKMPY) has had some curious ups and downs over the past two years. The company contemplated selling its injectables business (and got bids) only to decide to keep it, and the company's U.S. oral generics business was hurt by a warning letter in 2012 only to see a shortage of doxycycline in the U.S. lead to significant revenue and profit growth.

Hikma is going to be hard-pressed to maintain that momentum in doxycycline, but this remains a business with some strong growth potential. Not only is Hikma looking to leverage its position as the leading local manufacturer of branded generics for the Middle East and North African markets, but the company has begun to expand into other emerging markets. Although the stock carries an EV/EBITDA multiple that is demanding but not unreasonable, the price looks a little steeper on a discounted cash flow basis. Growth-oriented investors may find something to like here, but I suspect most value-oriented investors will give this one a pass.

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Hikma Has Strong Growth Potential, But High Expectations