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Perrigo's Stock Up, Starboard's CEO Calls it a Key Pick

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Perrigo Company plc’s (PRGO - Free Report) shares increased almost 5% after Jeff Smith, CEO of Starboard Value, a New York-based investment consulting company, declared that the company was a top investment option at the Delivering Alpha event hosted by CNBC.

Notably, Perrigo is one of the world’s largest manufacturers of over-the-counter (OTC) healthcare products and supplier of infant formulas for the store brand market. It is a leading provider of branded OTC products in the EU and the United States. The company also produces generic standard topical products.

However, Perrigo’s shares have underperformed the industry so far this year. The stock has gained 7% compared with the broader industry’s 21.7% increase.

During the conference, Jeff stated that Perrigo is undervalued at present due to pricing pressure, particularly in generics segment and because of changing dynamics in the United States. He continued to say that the company holds huge potential as a much larger business on the whole when compared with any single brand.

He further added that though many retailers are facing online challenges from e-commerce giants like Amazon (AMZN - Free Report) , Perrigo can utilize it as a prime distribution outlet for generic drugs and other over-the-counter (OTC) products.

At the conference, Jeff Smith also cited Altaba Inc. , a New York based investment company as another good option for investors to put money in.

We remind investors that Jeff Smith has placed a total of five members on the company’s board including two new ones who came late in 2016.

Zacks Rank & Stock to Consider

Perrigo currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the pharma sector is ACADIA Pharmaceuticals Inc. (ACAD - Free Report) holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ACADIA’s loss per share estimates narrowed from $2.82 to $2.57 for 2017 and from $2.07 to $1.90 for 2018 over the last 60 days. The company came up with positive earnings surprises in two of the last four quarters with an average beat of 7.97%.

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