| Stock (Symbol) | Stock Price | |
Valeant Pharmaceuticals (VRX) |
$254 |
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| Data is as of | Expected to Report | Sector |
July 31, 2015 |
Oct 19 – Oct 23 |
Healthcare |
| Sharek’s Take | ||
 Valeant Pharmaceuticals (VRX) is a machine right now, acquiring other drug companies and then moving the drug patents to Ireland to achieve ultra low tax situations. VRX is one of the hottest stocks in the market, it’s doubled in the past year yet still is undervalued at 22x earnings (with 34% sales & profit growth last qtr). Valeant, formerly Biovail, develops and markets branded, generic, and over the counter drugs and medical devices. The company is based in Quebec, but is growing exponentially by acquiring other drug companies, including Bausch & Lomb in 2013 and more 40 in 2014, then relocating the patents to Ireland where it has a factory to achieve a tax status of 3% to 5%. This company (and obviously the stock) is a machine right now. The only thing that can stop it is a change in the U.S. legislation or some kind of fraud. VRX sells for just 22x earnings and is expected to grow profits faster than 50% a qtr. This $254 stock has a Fair Value of $326, and its 2015 FV is $455, but this is subject to change as VRX will undoubtably stay on its buying spree. |
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| One-Year Chart | ||
 The only bad things about this one-year chart are (1) the company had down profits in 2008. I followed Biovail a decade ago and it wasn’t growing much at all, this is a far different company. (2) The stock’s on a run higher without a correction, so it is due one — and it could be a big one as investors get shook out. |
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| Earnings Table | ||
 Profits soared 34% last qtr on 34% sales growth. The company boosted 2015 revenue guidance by a billion dollars last qtr and another half billion this qtr.VRX beat the street by 10 cents last qtr, a solid number. Annual Profit Estimates increased, but had been climbing faster. Quarterly profit growth is expected to surpass 50% later this year, making it extremely hard for this stock to not surge higher. |
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| Fair Value | ||
 My 28 of 28 is very conservative considering how fast VRX is growing. I may make the Fair Value 35 next qtr. There’s solid upside in the near term by owning these shares, VRX has huge upside. |
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| Ten-Year Chart | ||
 VRX stock is on a bit of a parabolic move now, but the stock had some catching up to do as the P/E was an ultra-low 7 years ago. Now the P/E is still just 22. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
3 of 23 |
Valeant is one of my largest holdings as it is scheduled to grow profits 50% a qtr yet has a P/E of only 22. The only thinks that can derail this freight train are changes in legislation to take the tax loophole away, or some stupid fraud by management. VRX ranks 3rd in the Growth Portfolio and Aggressive Growth Portfolio Power Rankings. |
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Aggressive Growth Portfolio
3 of 8 |
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