Can you explain the mechanics? Something like: Pharmacy "X" sells the branded drugs, and Valeant funds part of the sales price from its coffers (presumably charging cost of goods sold). Valiant needs a lot of "pharmacies" because insurers would quickly know not to deal with Pharmacy "X"?
what's missing is whether the dividend is sustainable, or whether it depends on constant issue of new equity or increased leverage. No one seems to know.
I am impressed by Ackman's precision. I feel so much better knowing it is $448, not over 400, not $450, but precisely $448. Sounds like something a junior analyst would come up with.
Based on annualized 09/15 statements, I calculate debt to ebitda of about 12 (31 billion/2.6 billion); enterprise value multiple of about 20 ((31+21)/2.6), and price earnings multiple of about 75 (75/1).
How do commentators come up with cash flow per share of $14 to $16? Whay are they including that is not reflected in september figures?
When a Canadian stock drops 25%, double down, and watch it fall another 25%. Repeat until you have lost all your profits for the year. (Note: this rule to be read in conjuction wth investment rules 323 and 324.)
Canadian stocks that plummet do not benefit from dead cat bounces. Dead cats in Canada don't bounce - the reason for which remains unknown. One possibility under investigation by scientists: Canada's cold weather...
Don't buy Canadian stocks listed in US markets - they list here because there is no market for them in Canada, vis. Potash of Saskatchewan (thanks for not selling out to Rio at $40 per share - you can now pick them up for $20), Cameco (down from $40 to $13), and now Valeant...
I'm about to write some calls against my position. When I do, the stock will soar way above my exercise price, and I will lock in a hefty loss. I'll let you all know when I write the calls so shorts can realize their huge gains, and longs can make a ton of money.
More like - what's the next great news that is going to cause this stock to drop another 5%. This thing just can't get any legs.
The balance sheet for september says cash of 1.4 billion and receivables of 3.4 billion.
I am not sure what the concern is.
Assuming they continue selling at 93% of prior sales, they should be able to continue to fund sebt service and other obligations just fine.
However, if you believe that everyone will stop buying from them, then you are right - they will implode.
But so far, I don't see that scenario playing out.
Just because market cap equals debt doesn't mean the company has to issue new equity. They only have to issue equity if they can't meet debt service...