Have over $50k in this one. This company has been too battered as of late and investors are seeming to forget that all of this debt was used to BUY ASSETS. These assets have value. Key upcoming catalysts include. 1. Potential Asset Sales 2. Brodulumab approval and launch 3. Addyi marketing and sales uptick 4. Stabilization and return to growth of eye business and GI 5. De-leveraging For patient investors this one will be good in the next 12-24 months. In that period the bankruptcy risk is 0% (though this is trading at BK levels).
The problem with the debt to buy assets argument is that some of the latter acquisitions (some of the largest ones) were overpaid. Further, the slash & burn mentality of gutting R&D has left these underlying businesses a shell of what was once something entirely different.
Fair point, I still think this is in oversold territory though. With annual revenues of over 10B$ and FCF in the billions coupled with the fact that all 2017 debt is paid and that 2018 debt will also be paid shortly (with the asset sales and revenue) this company should be trading at a higher market capitalization that $4.5 Billion. Lets assume that by end of year 2017 there is $25B left in debt (keeping B+L, Salix, and Dermatology). With the Wal-Greens and Rite-Aid merger, Valeant will have a strong partnership with the largest pharmacy chain in the US with higher margins than when working through a middleman. Salix revenue and that of Xilafaxin is continuing to grow at double digits plus there are likely indications for this medicine with Crohn's disease etc. Brodulumab has higher efficacy than market leading Stelara in the $5B++ Psoriasis market, even if it can capture a 10% share that is adding a lot of revenue for an asset that was purchased for around $100M. Bill Miller was recently on CNBC twice saying that as long as FCF for Valeant remains high there are many things management can do to right the ship, he expects the stock to return 200-300% in the next 2-3 years. This is a high risk/reward play, however it is trading at bankruptcy levels with no imminent risk of Bankruptcy in the next few years.
Here is Bill Miller on CNBC this morning - http://video.cnbc.com/gallery/?video=3000589806&play=1 Comfortable with my holding and call options for 2018 and 2019 January
Daily basis, the bearish harami could lead more sell off but who cares if you are a long term trader but another buying opportunity.
This type of price action is what the brutally punished bulls need to see higher highs and higher lows from recent bottom process.
My LEAP options are in the money now - stock is continuing to climb. Buy when there is blood on the streets.
nice day for a few of mine and VRX up nice A/H FDA approves new psoriasis drug - http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm541981.htm
$VRX If the recent pattern from CLVS, SGYP etc are any indication there should be a dip and shake out before it heads higher. Let's see.
Valeant down nearly 10% even though they beat earnings Valeant Pharma (VRX) Tops Q4 EPS by 5c; Guides In-Line Source: http://www.streetinsider.com/Earnin...ps+Q4+EPS+by+5c;+Guides+In-Line/12602424.html
One thing many equity buyers are overlooking is the debt market. The unsecured bonds for VRX has been rallying in the last few days. That signals the creditors are putting more faith in VRX's upcoming debt restructuring.
