Valeant Pharmaceuticals Intl Inc (NYSE: VRX)
Valeant Pharmaceuticals has had a rough time in the market over the past year, and for good reason. After being caught in the midst of a scandal, investors dropped their shares fast. Nonetheless, quite a bit has changed since the scandal. Today, it can be argued that, after management changes and restructuring, VRX is a brand new business. But what are analysts saying? What about insider activity? And what does the mix of the two tell us about the future? Today, we’ll talk about all of this.
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Analysts Are Bullish Overall When It Comes To VRX
When it comes to Valeant Pharmaceuticals, analysts seem to be increasingly bullish on the stock. According to NASDAQ, there are currently 14 analysts weighing in on the stock. Of those analysts, 4 rate the stock a strong buy, 1 rates it a buy, and 7 rate it a hold, while only 2 analysts rate the stock a sell.
When it comes to 12-month price targets, things are looking relatively positive as well. On the low end, analysts see the stock’s average price over 12 months coming to $22 per share. On the high end, analysts expect that VRX will have an average price of $81 per share. The average between analysts comes to $40 per share, which represents incredibly strong growth from the current price of the stock (under $30 per share).
With analysts seemingly having a strong bullish opinion of what we can expect to see from VRX ahead, another good place to look at is insider activity. Luckily for me, this is also available at NASDAQ, and I have to say the data looks promising!
According to data available at NASDAQ, there have been 47 total insider trades over the past 12 months with 19 of those trades happening in the last 3 months. In the 12-month range, there have been 30 insider buy transactions for a total of 3,190,992 shares. 430,645 of these shares were purchased over the past 3 months by insiders through 16 different transactions. On the sales side, there have been 8 insider transactions at Valeant Pharmaceuticals with 3 of them happening in the past 3 months. These transactions included the sale of a total of 1,358,451 shares over the past 12 months and 1,398 shares sold in the past 3 months. This brings to total net insider activity in the past 12 months to 1,832,541 shares purchased by insiders with 429,247 net shares purchased in the past 3 months.
Other Important Data
So far, everything is looking good. However, to put the icing on the cake, let’s look at some other data and see if it supports growth in the value of the stock.
- P/E Ratio – In terms of price to earnings, VRX is likely one of the most appealing stocks on the market today. In 2015, the P/E ratio on the stock was only 3.71. In the year 2016, this is expected to head up to 4.55 before falling back to 3.82 in the year 2017. Considering these ratios, the stock is trading at well under what it should be, in my opinion.
- Earnings Per Share – If there’s one area that’s concerning with regard to VRX, it’s earnings. In the past 3 quarters, the company has missed analyst expectations as it continues to work on recovering from the scandal. Nonetheless, moving forward, analysts are expecting to see increasing earnings per share, which is a good sign.
Putting It All Together
While there’s no doubt that Valeant Pharmaceuticals has a long, uphill road to climb, the stock is looking more and more promising with each passing day. With strong positive analyst opinions, great insider buying activity, a very low price-to-earnings ratio, and expected gains in earnings per share, things are looking better and better for VRX.
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