Concordia International Corp (CXR.TO)

Trading at 4X earnings and at about 9X his estimated 2016 BV. Yes it is levered, but at 4X earnings and below BV, that issue is baked in. Thinks the stock goes higher or somebody comes running at it. CEO is a good guy that made a mistake with the financing. The sharks are going to come if the stock sits at $43.

They are working on reorganization. Analysts are forecasting a huge increase in earnings of roughly 70% giving a 4X PE multiple. The question is, can they get a refinancing at a reasonable price. The price decline indicates the market is not convinced. He would wait until they get the financing in place.

He owned VRX-T in the space, which is currently a hot potato. There will be a time to pick this up. Look at it again in January. It broke Trend in September and it has a lot way to get back to that trend. Healthcare is in a long term secular bull market.

He likes this company. Nothing has changed in terms of their strategy, their outlook or their prospects. The only thing that has changed is the valuation. Regarding their acquisition, everything looks fine. The financing closed. The only change is that it is now 8X earnings instead of 25. Thinks this has good potential from here.

He looks at a 1 year chart planning to do a 3 months trade. It is not looking too good. It is normally strong this time of year, but not this one. It is not the best place to be.

It was a high flying stock. It is not really a health care company. They don’t spend money on R & D. They are a financial engineering firm. They raised the price on their flagship drug since they acquired it. He thinks the issue is the Clinton Tweet to lower drug prices. The market is concerned about their debt also.

Support was in the high $70s and it cracked that. It is not a good thing. In the longer term support you look for support and he thinks it might be in the $40-$50 level.

They had one drug until a recent acquisition. They increased the price of one of the drugs and the US is talking about capping it or lowering. Another acquisition got them 190 more products in various stages of development. It is common to increase drug prices to fund R&D. According to the balance sheet they are better off than in the past. The story is not done yet. There is a lot going on with their drugs that de-risk the story.

The whole sector has been decimated in the last week. It is going to be a very volatile area. Sit on the sidelines for now.

(A Top Pick Sept 24/14. Up 156.7%.) Recently made a $3 billion acquisition. There is going to be a new issue, part of which is going to be equity. Just filed the shelf prospectus for that and are expecting to make $500 million with a 15% over allotment. They haven’t set the pricing yet, but the deal is well over subscribed. This is mostly being done in the US.

Made a big deal recently and thinks that a share issue is still pending, which has to be priced. Markets are waiting which is going to affect the stock. A 3-year chart shows it has done very well because of its acquisitions. The more volatile a market becomes, the more this type of company needs to have consistent earnings coming out. Look for support to happen at around $95.

If you own, he thinks you are alright for the time being. This company is dedicated to great growth.

Just made a $3 billion acquisition of 190 drugs in over 100 countries. There is going to be a new issue, which looks like it is going to be 100% done in the US of about US$100 million, and the stock dipped back down. This will now have a US listing. Dividend yield of 0.41%.

They are like a mini Valiant. They are buying some of the operations of the companies that are into drugs that have come off patent. He is cautious. There could be skeletons in the closet.

Just did a $3.5 billion deal. He has a model price of $121.09, a 22% upside. Expects growth to continue.