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Valeant Pharmaceuticals (VRX.TO)

TOP PICK
Terrific yield and an outstandingly good balance sheet. As a medical process that works, a slow release kind of stuff. Stock is very cheap. Kind of stock where only good things can happen. Thinks the yield is safe.
DON'T BUY
New management team seems to have done a pretty good job in terms of running the operation. Made a big acquisition, which always makes investors nervous. 15.25% yield could possibly be cut. This stock is too difficult to work out with all the moving parts.
DON'T BUY
Eugene Melnyk's challenge of the Board of Directors was withdrawn and very positive for the stock. Jury is out on whether they have sufficient drugs in the pipeline to turn it into a growth company. Would prefer others in generic drugs such as Teva (TEVA-Q).
COMMENT
Hasn't been in his portfolio for several years. Plagued with bad news. Just needs some good news somewhere. Model price is $21.27, a positive 100% differential. He is seeing a little bit of traction in this group.
DON'T BUY
Has many internal difficulties. A company that is very hard for him to understand what is going on.
DON'T BUY
Has had a very chequered history. Base business is quite attractive. With all the controversy surrounding it she would wait until things settle down.
DON'T BUY
Doesn't like their old strategy of trying to make “hard to manufacture” generics. New management has a completely viable strategy focusing on high-value add central nervous system drugs. However, they have never shown any skill set and it's a very competitive market.
DON'T BUY
Showing declining revenues. Volatile sector – been a disaster in past years. This stock is ahead in this sector but will face generics. Revenue profile is declining. Could add to position as a value play. Doesn’t like the sector.
DON'T BUY
Having fights about who’s going to be on the board and who’s going to run the show. Doesn’t like companies with this kind of dissension. 12.5% dividend and the market is saying that is unsustainable.
DON'T BUY
In a proxy fight with the founder trying to get back the company. Not a bad company but in a bad environment with the FDA right now.
SELL
(Market Call Minute.) Can't go up from here. Just had another change in management and there are no products on the horizon.
DON'T BUY
The former chairman is suing present chairman. Under investigation by the SCC. Not a stock you want to be in.
DON'T BUY
Earned $1.24 per share but paid $1.53 per share. Companies cannot sustain a dividend far ahead of their earnings for very long. Have had a number of problems over the last year. He wonders where the stability is going to come from.
COMMENT
This stock has lots of value, however bad news just keeps coming in. Model price is $24.36 but there are constant downward revisions in earnings. A lot of fat there. If you have tight stops, stick out your hand. If it broke down to $10.36, it will drop to $8.50.
DON'T BUY
The pharma sector has had a rotten time, declining earnings. This company will have worst earnings than last year. Would avoid the stock (Not value investors, don’t try to pick bottoms), in a declining environment this will perform poorly.
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