IS IT TIME TO BUY THE $VRX DIP?!?!?!?!?
Valeant Jolts Investors Again Over Earnings Goals, Debt
1 hour 16 minutes ago - DJNF
(FROM THE WALL STREET JOURNAL 3/16/16)
By Michael Rapoport, David Benoit and Sam Goldfarb
Valeant Pharmaceuticals International Inc., having struggled for months to reclaim investor favor, Tuesday offered a financial outlook worse than many feared, prompting an exodus from the stock that cut the market value of the company in half.
Shares of the drug maker plunged more than 51% after it said it is pulling back from its strategy, won't meet its previous earnings goals and may default on its debt, deepening further a downward spiral that began last fall when investors began questioning the company's accounting.
The announcement came on a much anticipated conference call led by Chief Executive Michael Pearson, who had been on sick leave for two months. Upon his return last month, the company scrapped earnings guidance. It still hasn't filed its 2015 annual report, or 10-K.
The news was one more jolt to investors who had endured months of uncertainty about the company's finances and leadership. The stock as recently as August was as high as $262 amid enthusiasm for Valeant's unusual way of doing business -- partly by acquiring drugs and hiking prices. On Tuesday the stock sank to close at $33.51 -- its lowest close since January 2011.
I stopped reading there... That fucking company seems done, Ackman lost ~$1 billion today. Probably a billion tomorrow, too.
I'd need some kind of reassurance if I am to invest in that.
>>1145344
VRX is either the next Enron or massively undervalued. Unfortunately I don't know which is true. I do like Ackman losing his ass. I hope Pershing Square fods and he ends up with a cardboard sign that reads 'will short companies for food'.
>>1145436
well im currently taking his on on a silver platter
that feel when no money to invest right now
>>1145344
holy shit
>>1145436
>VRX is either the next Enron or massively undervalued
VRX looks fairly valued according to King Shrekli.
I would say wait a week, if it goes down still. It's a buying opportunity.
Buy.
I immediately bought 10 shares once I saw it to down. I believe its significantly undervalued regardless of all the bullshit its been going through.
http://www.morningstar.com/stocks/XNYS/VRX/quote.html
http://seekingalpha.com/article/3958685-hold-hats-bought-valeant-stock-today
>>1147488
It's the next Enron. Have fun :-)
>>1147488
Ten shares wow... you are a big better.
Had my dad run this one through his sim, still has a way down to go
>>1147497
What is going to make it have a huge rise in value? It's hemorrhaging money like an axe wound.
>>1147497
I'll see you at the moon ethercuck.
>>1147544
Your risk is relative your financial position you fucking neet, i'm in college and broke so that is a BIG bet.
It's more likely they'll declare bankruptcy than anything. Or they'll be bought out at the last second.
>>1148203
This.
>>1148423
It's not worth the time of investing if you have that amount... Unless you're just practicing.
>>1144080
VRX is the new Enron, don't be a retard. If there was any value to be salvaged from that train wreck of a company it's gone. GG get good.
![[001604].jpg](https://i.imgur.com/lcY2cUp.jpg "[001604].jpg")
>>1148641
Any amount of money is work investing if you there is a good possibility of making more.
Its that kind of thinking that keeps you from being wealthy.
Now let me get more technical for you faggots in terms of value investing and why I believe VRX is a good bet:
My valuation implies an approximate 12.5 times multiple on my new estimate for the firm's 2016 EPS and assumes Valeant can eventually stabilize its operations and can meet debt obligations without raising equity capital or major asset sales. I'am leaving my initial assumption VRX having a narrow competitive advantage in place for now, but I DO acknowledge the company has significant challenges ahead to meet my expectations and to alleviate default concerns.
As long as the company can stabilize performance and address near-term volatility from the discontinued Philior relationship, I envision Valeant can produce sufficient cash to pay its $1.6 billion cash interest payments in 2016 with some leftover to help pay management’s target debt reduction of nearly $1.7 billion. At the end of the year, Valeant’s senior secured leverage ratio of 2.1 came in under the 2.5 debt covenant, and EBITDA interest coverage of 3.3 similarly surpassed the 3 times covenant requirement. However, the company’s delayed 10-K will remain a concern as management attempts to negotiate with lenders on a cross-default risk by missing its financial reporting covenant. As long as Valeant can file its 10-K by the end of April, I anticipate the company is likely to avoid a technical default with lenders.
Therefore my DCF model has predicted VRX a buying opportunity once is drops <$60.
My model sees a fair value estimate of the stock being in about the $120 range.
>b-but hurr durrr da debt
>what's value investing huurr durr
>>1149280
worth*
>>1149280
Looking at a similar valuation here. These drops seem unwarranted given their performance. Its debt issue appears to be more of a technicality than any real indication of financial default. Their adjustments to account for their related party transactions with Philidor had far less of an impact than expected, and unless there is some regulatory action taken against them, or legislation against their business model (which I do not see happening in the near future), I see no reason why they won't be able to continue to perform as they did prior to when these issues started cropping up. My only concern is whether or not their management has the ability to address all these present concerns effectively.
