VRX

GE Pulls Back From 8-Year High, Russia Still Pumping

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By Brian Nelson, CFA The last week of each calendar quarter is often a busy one for the Valuentum team. Not only did we release the Dividend Growth Newsletter on the first of the month (download ), but we also released the financial advisor publications as well (see here). If you haven’t received them, please be sure to let our team know, and we’ll forward those along to you. These documents just scratch the surface of our research and analysis offering. Please don’t forget to RSVP for an upcoming orientation webinar here. We also wanted to make you aware of the update cycle for our ETF analysis. We’ve now released the 2016 versions for the Consumer Staples (), Consumer Discretionary … Read more

Valeant’s Back Firmly Up Against the Wall

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Image: A bottle of Valeant’s anti-depression drug Wellbrutin lay in disarray, much like the company’s operations. Wellbrutin was one of several key drugs on which Valeant used questionable pricing strategies to increase sales, source: Wendy. Valeant (VRX) CEO Michael Pearson said it rather bluntly on the firm’s preliminary fourth quarter 2015 press release, “The challenges of the past few months are not yet behind us…” The company has faced a significant amount of political and financial pressure in recent months as the firm has been the subject of numerous investigations from government agencies and multiple litigations, and also delayed the filing of its 2015 annual report to April. Valeant has warned that it could face an “event of default” if … Read more

Around the Horn in Biotech/Pharma: 3Q Earnings Review

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The biotech (IBB) and pharma (XLV) industries have been two of the strongest-performing segments of the market since the March 2009 panic bottom during the Financial Crisis, but the broader healthcare arena has been under siege as of late. New discoveries underscored by the development of a cure for hepatitis C with Gilead’s (GILD) Solvadi/Harvoni and a huge step forward in cystic fibrosis treatment with Vertex’s (VRTX) Orkambi have helped fuel the exuberance, but established pharma entities have also caught a bid as they successfully worked through the “patent cliff,” capturing the wave of dividend growth investors and acquiring budding new pipelines from smaller rivals along the way. The past few months haven’t been kind to biotech investors, however. What … Read more

If It Happened to AbbVie, Could It Also Happen to Gilead?

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The Valeant (VRX) and Citron saga is not all the drama happening in biotech these days. On October 22, federal health officials warned doctors and patients that two of AbbVie’s (ABBV) hepatitis C treatments can cause life-threatening liver injury in advanced stage patients. The Food and Drug Administration announced October 22 that it will require AbbVie to add new warnings to its Viekira Pak (1) and Technivie (2) drugs after deaths and liver transplants have been reported in patients who already had liver damage caused by the disease. During the second quarter, global sales of Viekira were $385 million, on pace for blockbuster status. Viekira is one of AbbVie’s top drugs, trailing only Humira in sales during the six months … Read more

Valeant Crushed by “Short-Seller” Research Report

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Additional uncertainty has surfaced around the biotech firm. We can’t say we are surprised, but the company’s share-price decline has been a monumental one. Despite Valeant’s strong reported performance in recent quarters, the Valuentum Buying Index kept us away from such a risky stock. Please understand why paying attention to the information contained in prices is an important component to any value-, growth- or income-based strategy. Valeant Pharmaceuticals’ (VRX) shares have taken a major shellacking as a result of a research report accusing the firm of Enron-like activities. These are some serious accusations, and Valeant has since defended itself, which has given its shares a sizable bounce. We can’t say we’re surprised there was a material drop in Valeant’s share … Read more

Attention to Pricing Issues Pressures Valeant

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As recently as early August, Valeant Pharmaceuticals (VRX) was flying high, continuing its history of aggressively pursuing acquisitions and profiting greatly from newly-acquired drugs. However, exactly what had allowed the firm to grow at a substantial pace has caused a precipitous fall in its share price and may cause significant pressure to the biotech industry (IBB) as a whole in the relatively-near future, or so some are positing. Valeant has a reputation for growing through acquisitions and aggressively cutting costs during the integration of newly-acquired companies. Through the acquisitions of other biotech and pharmaceutical companies, Valeant becomes the owners of various drugs, of which it then has control over pricing. This is where the company, in the eyes of some … Read more

Biotechs Bruised

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Biotech stocks, in general, are more volatile than the average stock. Small-cap stocks (VB), in general, are more volatile than the average stock. Small-cap biotech stocks then may very well be the most volatile of any grouping of stocks. Unfortunately, the recent direction of volatility across equities in the biotech arena has been of the sharp, downward variety and has been most unwelcome, amid a broader market decline. Mr. Market is having a temper tantrum, but all the while, he may have every right to be upset. The iShares Nasdaq Biotechnology ETF (IBB) is perhaps the best proxy for the market’s appetite to bet on the development of long-term drugs and therapies. The industry ETF, which sports a trailing price-to-earnings … Read more

Guide to Second Quarter Earnings; Big Pharma Experiencing Earnings Momentum

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Abbott (ABT) Abbott is one of our favorites in Big Pharma. We know many of you hold the stock in your own portfolios, and frankly, the company is one of the best operators in its industry. Abbott’s second-quarter performance revealed continued strength in its global diagnostics and branded generics businesses. Foreign currency exchange headwinds have posed problems for almost every multi-national in our coverage, but on an operational basis, second-quarter worldwide sales leapt nearly 10%. Abbott kept its full-year 2015 adjusted EPS guidance range from continuing operations unchanged at $2.10-$2.20, a rarity across a pharma universe that’s experiencing fantastic earnings momentum as of late. Keys to the Quarter: We were very pleased with the traction witnessed in Abbott’s pediatric nutrition … Read more

Warning! 5 Heavily-Followed Dividend-Paying Stocks to Avoid

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Zoetis (ZTS) The share price of Zoetis, the leader in the production and commercialization of animal health medicines and vaccines, is trading at a substantial premium to its standalone intrinsic value as a result of speculative optimism that a takeout of its shares might happen. Activist Bill Ackman’s near-10% stake in the 2013 spin-off of Pfizer (PFE) has investors believing a deal may be in the works, but there’s no real evidence of one. In fact, it appears investors are desperate to see something (anything?) happen: on June 25, for example, Zoetis leapt more than 10% immediately on unfounded rumors that Valeant Pharma (VRX) was putting together a bid. We don’t think a buyout of Zoetis is going to happen … Read more

4 Opportunistic Stocks To Consider Buying in 2015

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The Valuentum Buying Index (VBI) is a philosophy that considers the valuation of a company and the likelihood that a company’s stock will converge to a cash-flow derived fair value estimate. The VBI accepts the view that value is based on the sum of a company’s future expected discounted free cash flows and the excess cash on its balance sheet, while acknowledging that market participants must eventually agree with a firm’s underpricing (and buy the stock) in order to drive the stock’s price to fair value. An underpriced stock with no buying support is not poised to generate good returns, nor is an overpriced stock with good momentum as it will eventually succumb to panic selling once euphoria fades. Stocks … Read more