It probably comes as a surprise to many Valeant equity traders and investors that the company has a sub-investment grade credit rating.
Now, Valeant may or may not default. But what’s clear is that the mispricing in the high-yield debt market allows companies like Valeant to lever up with impunity.
Equity shareholders are also complicit for having failed to punish companies with too much leverage.
Whether it’s a sharp decline in oil prices, corporate malfeasance, an economic downturn, or some other unforeseen event, the risks that may cause a default are manifold.
And these risks pose an even greater threat to investors in highly-levered companies.
Search this article and read it:
"Valeant Woes Prove Dangers of “Reaching for Yield”
SCARY SO SCARY !
A Nasty Shock for Yield-Chasing Valeant Investors
As you probably know, shares of Valeant Pharmaceuticals International Inc. (VRX) got hammered last week when the company became the target of fraud allegations.
As for the company’s fixed-income securities… the 6.125% bonds due in 2025 traded down to $83.50 on October 22. As recently as early August, those same bonds traded for more than $104.
The following table shows some of the largest U.S. high-yield issuers this year. Valeant actually tops the list.
TITN look what they say about demand !
DD pe over 20 ?
Titan Machinery Inc. owns and operates a network of full service agricultural and construction equipment stores in the United States and Europe. The company operates through three segments: Agriculture, Construction, and International. It sells new and used equipment comprising agricultural and construction equipment manufactured under the CNH family of brands, as well as equipment from various other manufacturers. The companys agricultural equipment include application equipment and sprayers, combines and attachments, hay and forage equipment, planting and seeding equipment, precision farming technology, tillage equipment, and tractors for farming, and home and garden applications. The companys construction equipment comprise articulated trucks, compact track loaders, compaction equipment, cranes, crawler dozers, excavators, forklifts, loader/backhoes, loader/tool carriers, motor graders, skid steer loaders, telehandlers, and wheel loaders for commercial and residential construction, road and highway construction, and mining applications.
see the article this morning from deutch bank they say there is no forrest fire YET but the SMOKE is too THICK for their LIKING !!!!!!!!!!!!
According to the survey, prescriptions for Valeant drugs has decreased for a majority (68 percent) of the doctors. In addition, the majority of doctors (also 68 percent) expect their prescribing of Valeant products to decrease in the coming months.
many don;t realize that individual investors cannot support a big cap stock like this one
it takes huge amounts of institutional money inflows to do that and if you really think about this how many of the institutions would want to say they own this stock at the end of the quarter ?
of SUPPLY and DEMAND and the fact that THOSE SUPPORTING it have EXHAUSTED their FUNDS it CAN MUST AND WILL GO LOWER IMO !
the debt on this company is going to shake up the whole bond market !
who is insuring these junk bonds ?
This continues to post lower HIGHS AND LOWER LOWS !
the market is SPEAKING to you ie
Are you listening ?
dks stock is tanking huge along with Urban Outfitters/Banana Republic (DKS URBN)
the size of the drops in these retailers indicates massive implosion of retail sales..
Nike is strong due to brand identity but at some point it has to be affected...
I am simply trying to give you an objective picture of the retail landscape
that's especially important when you are buying a stock with price earnings ratio of 30 as any disappointments will be dealt with severely..
not sure why you would not want to know whats really going on under the retail hood..
Check out Retailers DKS URBN (dcks sporting goods urban outfitters/banban republic) to see
whats going on with retail sales still suprised hd made numbers....
ALSO SEE BELOW:
Sentiment among U.S. homebuilders fell more than expected in November, according to a monthly industry index, with scarcity of land and labor continuing to stymie growth. Builder confidence fell three points to 62 on the National Association of Home Builders/Wells Fargo Market Index (HMI).
Look at it now if you dare !
who is insuring the junk bonds ?
I tried to warn you repeatedly when it failed to hold 100 !
The size of the drop in these stocks is staggering !
what does this indicate about retail sales and AXP revenues going forward do you think ?
to look at the magnitude of the drop in these 2 retailers
what does this imply about retail sales and visa transactions for next quarter i wonder ?
agreed check out dks sporting goods and urban outfitters this am to see the state of the consumer
follows macys nordstrom dillards many others
(DKS URBN) look at the magnitude of the drops