Concordia International Corp (CXR.TO)

It is dead money. This has been a disaster. You are going to see a lot of write-offs from this company. You have to wait for the write-offs. His model price is a little misnomer. You could hold it if you own it.

A lot of people took a bath this year. There were a few additional issues that came up. BREXIT hurt them more than expected. The acquisition of Amco was based primarily in Britain, and the currency translation really hurt. Also, they have generic competition for some of their US drugs. When you have a large debt outstanding, there is no room in your equity. Sold his holdings in the high teens. He doesn’t know if they will survive. Take a tax loss today, and then later on you can buy it back.

Very, very cheap. Sells at Price to Book at about 3. Of that book value, to all sense and purposes, it is all “goodwill”, which he might refer to as water in a portfolio. Analysts have been slow in pulling down their earnings forecasts.

Not a company that is investable at the current price. They have a massive debt load. The UK is changing the rules with respect to generic drugs. They’ve had management changes. Incredibly speculative.

Management has just not delivered. The last 2 quarters were pretty big surprises, even to management. The US business is floundering. You can’t trust management forecasts at this point. They are in a transition phase and scrambling to sell off an asset.

He feels there is value at these levels. They are generating cash flow from operations.

(A Top Pick Nov 3/15. Down 88.26%.) This was just a bad call in retrospect. BREXIT, their US competition in some of their key drugs, and their high debt created a disaster for them. He doesn’t know if they even survive.

This is about as toxic as they come. Integrity of financial reporting is in question. He is not a fan of pretend earnings. The stock chart is badly broken. The business model is under heavy attack in the US. The bonds are CCC rated.

It is uninvestable. It would be a speculative buy. They are generating cash now but there is so much debt and they don’t have a CEO. A year from now it will either very low or very high. The leverage works both ways. He recommends trading it.

The pharmaceutical space has not fared well in the US or Canada. This is a high debt company where the future is really uncertain. He doesn’t see any reversal to this major downtrend.

It is a call option on whether the debt holders will start declaring bankruptcy. The strategy had a lot of merit. They made a mistake by taking more debt for their UK acquisition when the financing was not fully lined up for it. Brexit caused the company to decline, but the debt was in US$. It is crushing the company.

Looking at what the price used to be, doesn’t mean this is cheap, it just means that the price was really, really high. Whenever a company’s market cap gets bigger than the Royal Bank, you know you are in trouble. Avoid.

It has a lot of issues. It has the whole US system that is focused on the drug sector. The basic model was to take over drugs and patents, and to repurpose them or at least reprice them to higher levels. There is an immense amount of debt. When regulators smell blood, they circle and attack, and do not stop. Any sort of accounting irregularity never gets better.

Doesn’t think there is any probability of a recovery. It has a lot of issues ahead of it. In the UK, the NHS tabled a bill that will essentially directly affect the company in bringing down drug prices. In the last conference call, they reduced their guidance significantly. Also, they are now starting to get generic competition in the US, which was not foreseen. They have a lot of debt, and it is not inconceivable they could go to zero.

Had liked this in the past. Their most recent quarter was brutal. It seemed like management was blindsided by the results. He got out at around $13. Over the next 3 months, no fund manager is going to want to hold this in their portfolio.