The Motley Fool: 401(k)s; the big picture; taking stock of Teva
Every Sunday, useful tips on investing.
Ask The Fool
A good time for 401(k)s
Q: Is this a good time to start contributing to a 401(k) account at work?
A: When it comes to retirement savings, most of us should be regularly saving and investing, without much regard for the state of the economy. Crunch some numbers to see how much you'll need to save for in retirement. You might want to invest 10 or 15 percent of your income.
The big picture
Q: I found a company that seems to be doing everything right: Sales are up 47 percent, income is up 64 percent, there's no debt ... and yet the stock keeps going down. Am I missing something really obvious?
A: Well, you need to look at more numbers. Check out expectations, too.
If the company and/or Wall Street analysts expect slower growth in the future, that can dampen enthusiasm for a stock, sending it down.
Then there's the stock price itself.
Since the company has been growing briskly, investors may have bid above its intrinsic value, and the price may now be settling back to more reasonable levels.
Always look at a company's big picture.
The Motley Fool take
Teva Pharmaceutical (Nasdaq: TEVA) is asking the government to approve its copy of Amgen's Neupogen under the normal branded-drug process.
Generic drugmakers can get small-molecule drugs approved through an Abbreviated New Drug Application (ANDA). If they prove their version is similar to the branded drug, the Food and Drug Administration can use the original data from the branded drug's New Drug Application (NDA) to establish safety and effectiveness.
Interested investors should learn the FDA's decision soon.