It's surprisingly easy to outsmart yourself in the market. For all of the weighty financial tomes and countless valuation methodologies out there, a simple fact is often overlooked: Companies that have performed well in the past are more likely to do so in the future. Accordingly, it's often a very Foolish idea to buy good companies on pullbacks.

With that in mind, I'm still a fan of Israeli generics giant Teva Pharmaceuticals (NASDAQ:TEVA). Now, I won't stick out my neck (or other body parts) and claim that Teva is flawless. But I do believe that it's a strong company in a good industry with solid long-term growth prospects.

Results for the second quarter were satisfactory, though not scintillating. Sales were up 4%, operating margin was essentially flat, and net income was up 5%. While U.S. generics sales were down about $100 million, according to the company's conference call, strong sales of branded products such as Copaxone helped limit the damage.

For now at least, Teva shares a problem with the large pharmaceutical companies it bedevils -- few big-time U.S. product launches. While that should continue to be an issue for 2005, the future still looks pretty good. The company has about 140 product applications waiting at the FDA, and the company believes it is first-to-file on 37 of them.

In the meantime, Teva continues to generate considerable cash flow and maintain its position as a top dog in the generics business. True, the newly enlarged Novartis (NYSE:NVS) will be more of a threat than before, but Teva didn't get this far without having to face serious competition.

I like Teva's business, and I still like what the recently announced combination with Ivax (AMEX:IVX) could do for this company. Teva isn't just gaining Ivax's generics and branded businesses (including research into an oral MS treatment). Ivax is also currently suing Forest Labs (NYSE:FRX) on its Lexapro patents in hopes of selling a generic form much sooner than Forest would like. It's probably a long shot for it to win, but a successful outcome would certainly be a nice little piece of good news.

Teva doesn't look like a dirt cheap value stock, and I'm not trying to suggest that it is. I am trying to suggest that it's a high-quality company trading at a level that should still provide patient investors with solid long-term performance.

For more on Teva and other generics:

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