Here's Why Allergan Stock Might Be an Incredible Bargain After Dropping 9.9% in August

Despite a stronger-than-expected second quarter earnings report, Allergan's (NYSE: AGN) two month long rally came to an abrupt halt in August with the stock losing 9.9% of its value, according to data from S&P Global Market Intelligence. The specialty drugmaker's shares were apparently brought down by its loose association with Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) via its 9.9% stake in the Israeli drugmaker, as well as its former ties to the struggling generic drug industry.

As a reminder, Allergan sold its massive generic drug business to Teva last year in an equity and cash deal valued at $40.5 billion. Unfortunately for Teva and its shareholders, generic drugs have come under immense pressure from a margin and pricing standpoint due to higher levels of competition over the past year. The market, in turn, has started to bake these significant headwinds into the valuations of nearly all generic drug manufacturers of late, causing Teva's shares to tumble.

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Source: Fool.com