Actavis (NYSE:ACT) — This producer of generic and branded drugs was recommended on our list of Top Stocks to Buy for April, where I said:
“The stock has been consolidating in a bullish rectangle since November, which followed a six-month bull channel that resulted in a gain of almost 30%. In late March, ACT popped above the rectangle’s resistance at $90 on a steady increase in volume. Buy ACT for a trade to $100.”
This week, a London court ruled that a patent protecting chief rival AstraZeneca’s (NYSE:AZN) asthma drug, Pulmicort, is invalid, and a New Jersey District Court quickly affirmed the London decision.
This allows Actavis to launch a copy of the drug in the United States and Europe. It is not currently known how much the courts’ decisions will add to the company’s earnings, but it could be very significant. Actavis will update its 2013 forecast on its Q1 earnings conference call on May 2.
Meanwhile, the target for Tuesday’s massive breakout is revised upward from $100 to $110. Long-term investors may enjoy much higher prices.