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Valeant Pharmaceuticals (VRX.TO)

PAST TOP PICK
(A Top Pick March 11/09. Up 16.59%.) Sold this in March.
DON'T BUY
No chance of a dividend increase. All kinds of things in the pipeline. We have to see the earnings perk up. Al little too speculative.
DON'T BUY
Cut its dividend and expects they will make acquisitions. Good drugs in the pipeline. Doesn't follow this one closely since when they had management and legal problems.
BUY
Cut the dividend to conserve some cash and doesn't think they will increase it. Have a new growth strategy in place. Earnings are starting to grow again. Trades at about 9X forward earnings and the balance sheet is in pretty good shape. Generic sector is still growing.
PAST TOP PICK
(Top Pick Feb 13/09 Up 6.7%) Done quite well. Still Favours it, but not with excitement. Only decent, diversified pharma conglomerate. Hold.
DON'T BUY
Healthcare sector has been improving recently. Has been great concern around healthcare in the US. Pharmaceutical stocks have started to perk up in the last six weeks. Although this one has good yield, there is no growth. He would look at generics such as Hospira (HSP-N) or if looking for yield go to Bristol Myers (BMY-N).
PAST TOP PICK
(A Top Pick Jan 26/09. Up 11%.) Ranks 496 in his database and year-over-year earnings were down 4%. Can't see any growth so he sold.
TOP PICK
Likes a story that everyone else hates and there is a very low valuation. They re-invested themselves. Balance sheet is in great shape. They are focused on central nervous system drugs. The valuation relative to the rest of the group is very cheap. They are generating tones of cash. High operating margins, high free cash flow. Analysts are just starting to pick up on it.
DON'T BUY
Always problematic because you are dealing with a pharmaceutical company that has to fight against generics. These businesses have great free cash flows but there is no growth
TOP PICK
They are reinventing the company. People were worried revenues would tail off, but they didn’t. Growing. It’s a good story and getting recognized. There is some US interest in the name. What else do you have in healthcare in Canada
TOP PICK
Have re-invented themselves recently. They are getting back to core business. They have a lot more in the pipeline than in the past. It is undervalued.
BUY
One of their new drugs has not had good results. However, it was only 4% of the money they had spent on acquisitions so not meaningful. Ridiculously cheap at 8X earnings. Not much Canadian competition. If it had a good run, she would be taking profits on it. Good management team.
DON'T BUY
(Market Call Minute.) Scared of this one. Some of their major products are under attack from generics. Pipeline does not look very full right now.
HOLD
Recently acquired the US rights to Welbutin. They also cut the dividend significantly but are still paying about 3%. Trades at a very low PE multiple and generates a lot of free cash flow.
DON'T BUY
Cutting dividends does not help any company. Entire pharmaceutical space is down year-to-date because of patent products rolling off. This is a very tiny player in a big pond. Wouldn't touch this one.
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