"A large Canadian specialty pharmaceutical company was a market darling wherein its debt funded acquisition led growth was cheered and rewarded by the market. Our QoE analysis in April 2015 focused on: Aggressive B/S: Alarming Debt to Equity ratio, poor AZS 1, poor debt servicing ratios etc. Change in revenue recognition policy (at one acquired company): From ‘at the time of shipments to ultimate customer’ earlier to ‘at the time of shipments to wholesalers’. High Intangibles on B/S: ~ 4 times its Net Worth; potential w/off in offing. Suggestive of aggressive capital allocation policy. Deterioration in M-Score 2 from mid 2000s. Recurring and large restructuring charges. Hard to decipher sustainable/applicable tax rate. Aggressive acquisition bid of another US based specialty pharmaceutical company, with similar QoE and Corporate Governance issues. Grade assigned by Multi-Act Research Report: B- (Ranges from A, B+, B, B- and C; wherein A is best and C is worst)." Source: http://multi-act.com/quality-of-earnings-a-sound-filter-board-to-avoid-permanent-loss-of-capital/
They are burdened by a heavy debt load - if I were to buy a drug stock I'd choose one with less leverage and less bankruptcy risk. .
"Valeant's Debt In 2020 'May Be Too High A Hurdle" http://www.benzinga.com/analyst-rat...aleants-debt-in-2020-may-be-too-high-a-hurdle .
http://www.elitetrader.com/et/index.php?threads/vrx-time-to-buy.299757/page-7 Stick with the "official" thread on Valeant (above). Forget these "always wrong" analysts. Right now it's getting hit with all of the other biotech bad news noise. When that ends, it's going up.
The Falling Knife Is Landing $VRX. Can't wait to see the next ER report, more good news than bad for sure
I disagree - this is the "official" thread on Valeant. The other thread was created more than 6 months after this thread. .
The last week trading looks very familiar to anything Goldman does before a deal is announced. Drop price with small vol. = GS.
Wells Fargo: VRX accounting worse than first thought http://thefly.com/landingPageNews.php?id=2390709&headline=VRX-Valeant-analyst-commentary- https://twitter dot com/ms101phd/status/744978019807178752 https://twitter dot com/LukeFenek/status/744976438550495232 .