Valeant Pharmaceuticals (VRX.TO) Buy, Sell or…

Valeant Pharmaceuticals (VRX.TO)

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BUY

The issue about generics is not a concern as it takes time for generics to take hold. Have other products in line and he likes their story. Management has done a great job of restructuring. Trades at a very low multiple. Throws off lots of free cash flow.

HOLD

Lost a patent infringement case on their Wellbutrin allowing a generic manufacturer to produce a cheaper copy. Also, the OSC accused their chairman of breaching security rules. Fundamental value doesn't look all that bad. If you own, wait to see how the market shakes out.

DON'T BUY

This is not in the TSE100 which he requires for it to qualify for his Canada Focus fund. May stop at $15.50. Will be interested to see what the earnings do.

DON'T BUY

A little concerned with their key drug, Wellbutin, coming off patent. Could have some generic competition sooner than expected. Their new drug Alltrun ER has started up a little bit slower than expected. A little concerned on the next couple of quarters on earnings growth. Has sold his position.

DON'T BUY

Operational side has improved enormously. New CEO has done a good job. Their stent technology seems to work. Only 2% yield, where some of the other larger Biotech's are safer and give you a better yield.

DON'T BUY

Was a one trick pony and is trying to become a two trick pony. There are no guarantees so there is a risk. Had accounting problems which created a drop in the stock.

DON'T BUY

Turning itself from being a 1 trick pony into more of a diversified pharmaceutical company. There is a counter party risks as the credit rating is only BB high. Would rather see them spending all their time on research and development rather than seeing them fend off a lawsuit or get aggressive.

DON'T BUY

This company tends to move on news. Not crazy about the governance of the company.

BUY

Cheap on at valuation basis. Have great cash flow. Very little debt. Has always been an undervalued franchise since the stock collapsed. Sold off a lot of their US sales franchise and really cut back on their cost structure.

BUY

He has a model price of $43.60 which is a 56% positive differential.

WEAK BUY

Earnings beat analysts’ estimates, but only by a few cents. Has done well over the last year. The question is, what is the multiple going forward. Based on some analysts estimations, it could be 16 X, which isn't rich but the company would have to make big jumps to get there.

DON'T BUY

New management has seems to have cleaned it up and turned it around. Their technology does work. Hedge funds are creating problems with legal issues, etc. There are better world class drug companies available.

HOLD

Biovail is in the top 15% of the data base. It has had 14% earnings growth. It is a reasonable price. He does not own currently, sold it because of the concerns in the market . Interesting, yet cheap. Hold or add to on a pull back.

BUY

Even with Citigroups downgrade, he likes it. Putting the Citigroups earnings estimate in their model price remained the same. It doesn't qualify for canafocus(sp?) (not top 100 in TSE) so they can't buy it. But it sounds like they would otherwise.

PAST TOP PICK

(A Top Pick Nov 23/05. Down 1.7%.) An analyst from Citigroup put a sell signal on which knocked the stock down. Still sees a lot of value in this stock with a 46% positive differential.

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Valeant Pharmaceuticals (VRX.TO)