"Bad News" for Teva? Yawn.

Bad news can be the best thing that ever happens to long-term investors. As long as you're not playing the day-trading game (and if you're reading a Motley Fool article, it's a pretty safe bet you're not), a little bad news now and then can be an avenue toward picking up some slightly cheaper shares.

Take a look at TevaPharmaceutical (NASDAQ:TEVA). Although the stock has recovered a bit as of the time of this writing, it was down about 5% in early trading on Monday.

Why? Because a judge issued a preliminary injunction forbidding Teva from selling a generic form of Abbott Labs' (NYSE:ABT) Biaxin XL (clarithromycin extended-release tabs). Following the news, the management at Teva lowered second-quarter earnings by $0.04 (about 10%). It did not change its annual guidance of $1.56 to $1.63 but is currently evaluating whether it does, in fact, need to do just that.

Of course, Teva will appeal this injunction, and the district court case concerning the validity of the patent still awaits adjudication.

This is exactly the type of overreaction that has put a couple extra percentage points of performance in my pocket over the years. Teva is a huge generics company that has weathered such storms before. And although I admit it's not exactly commonplace these days to see a judge grant a preliminary injunction, I don't think I'd call this the start of a trend.

What's more, Teva's pipeline for the 2006-2008 period looks pretty strong, so even if 2005 proves a bit tougher than 2004, there is reason for optimism about the future. This is a company with strong earnings growth, good return on assets and equity, and a stated goal of doubling revenue every four years (without savaging the bottom line to do so).

Better yet, Teva is the type of story in which strength builds upon strength. The more drugs it sells, the more it can spend on scientists and lawyers. The more it spends on scientists and lawyers, the more drugs it will have available to sell. Rinse and repeat.

So for those investors who think that Teva will maintain its top-dog status in the generics world, this is just a blip on the scope and/or the opportunity to build a position. It's not the cheapest stock around, but quality is rarely marked down too cheaply. Whether they market their generic version of Biaxin XL as soon as they'd like or not, I think Teva will continue to maintain its share of approximately 1 in every 16 American drug prescriptions.

For more decidedly non-generic opinions, try these other Foolish takes:

• Able Labs Disabled
• Value in Drug Stocks?
• Novartis' Triple Threat
• Teva: Scourge of the Drug World?

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).