Wishful thinking in my view - sale of 15% of Ackan's stake in VRX confirms he has lost confidence in this company sorting itself out anytime soon. Tax advantage of 30% is chump change if he thought the stock would recover. Price of $150 in 2016 requires positive news of some type. Hard to see any given continuing implosion of company (loss of key man, sale by Ackman) . Too bad - because I am long.
I don't understand: Biomarin is a competing product. Why should its success in getting CRL cause SRPT's price to go up? My view is that, if Biomarin gets CRL, SRPT's share price drops sharply.
I recall hearing that you should not buy master limited partnerships for IRAs. I think it has to do with the fact that dividends include a return of capital - which is not taxable when received outside an IRA, but (eventually) becomes taxable inside an IRA when the IRA is liquidated. Check out before you buy....
The problem is that no one knows: (a) the extent of prescription-tampering used to increase sales; (b) what the impact of newly lowered prices will be on sales/net income, and (c) the amount of legal damages that the company will be subject to. I suspect that the company itself is not fully aware of (a), that it only has a rough estimate of (b), and that it has no clue about (c). Add to the mix the indefinite absence of the key-man CEO, the fact that, as a Canadian company, management probably has no clue how to handle upcoming congressional hearings, and Ackman's recent vote of no-confidence (i.e., sales of 15% of his stake), and it is surprising that the shares are still where they are.
So, he thinks the shares have so much intrinsic worth at these prices that he sells 15% of his holdings to generate a tax loss. Reminds me of my mother-in-law who prefers to spend a dollar in mortgage interest to save 30 cents in taxes. Clearly, he has lost confidence in the company.
Okay - what makes this dullard turn around plz? If only 10% of revenues are affected by oil/gas prices (as per an ETP presentation), then an increase in these prices will not have much effect. I can only surmise that new projects are not expected to have as good returns as old projects because investors are expecting upstream companies to negotiate much lower tariffs - because of the strain that upstream are under. But I thought all the tariffs are negotiated before the new projects are implemented. Honestly, I can't figure this stock out at all.
I like your answer because you distinguish between old projects and new projects. Indirectly, you bring out the point that the dividend of 10+% that the company is making is really a combination of return ON the capital invested in old projects, as well as the return OF the capital invested in the old projects. Do you agree?
you mean that insurance companies don't track which scripts they have already paid for? or that several insurance companies are being billed for the same script?
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...