Valeant Pharmaceuticals Intl Inc (NYSE: VRX)
Valeant Pharmaceuticals is having a great day in the market, and a much needed one considering the massive declines the stock has been through as of late. While the declines we saw we definitely warranted, based on what we’ve seen from the company as of late, I believe that the losses are over and now, it’s time for gains. Today, we’ll talk about why VRX has had such a rough time, what we’ve seen from the company since, and why now is the time to buy!
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Why Valeant Has Had So Much Trouble In The Market
The problems for VRX started late last year. For quite a while, the company was under an agreement with a pharmacy known as Philidor. However, whatever was going on in that agreement wasn’t up to par. As a result, an analyst firm known as Citron decided to look into the company. What they found was a scheme that made it look as though Valeant’s sales were quite a bit higher than they actually were. Soon, Citron published a report calling VRX the Enron of the pharmaceutical industry. This was a low blow, but in all actuality, it looked like Citron was onto something.
Soon investigations started and it was found that using its relationship with Philidor, Valeant did indeed fudge its numbers. So, investors started to push for a cancellation of the agreement between VRX and Philidor. After a short period of time, it was announced that the two companies would be going separate ways. Of course, this came with its own issues. You see Philidor was Valeant’s largest customer. So, when the agreement was canceled, a big chunk of sales at VRX flew out of the window. The entire scandal lead to downward trends that would last for months.
What We’ve Seen From VRX Since The Scandal
Following the Philidor scandal, there were quite a few big changes that we saw from VRX. First off, just about a month after the scandal, it was announced that Valeant had signed an agreement with Walgreens. Under the agreement, VRX products would be available at one of the largest pharmacies in the world. However, the changes didn’t stop there. Soon enough, it was announced that the board would be adding new members and that the CEO of the company would be resigning from his position; all of the changes were welcomed by investors.
Why Now Is The Time To Get Involved
VRX has done the wrong thing, there’s no denying that. However, because of the issues, the price of the stock has fallen dramatically. Nonetheless, there are still plenty of reasons to be bullish on the stock. You see, Valeant controls a wide range of high quality products in the medical industry. With their contract with Walgreens, it only makes sense that the company shouldn’t have much of a problem selling these products. Earlier on, investors were concerned that there would be so much money hidden behind this scandal that VRX would have to file bankruptcy. However, the company recently announced that all investigations into its finances were complete, and while more than $50 million that investors were worried about is a victim to the scandal, there was no more money that was missing from the books. So, bankruptcy is off of the table. With new management coming in, a long list of solid approved products, and a strong pipeline, it only makes sense that VRX is going to flourish from here.
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What Do You Think?
Where do you think VRX is headed and why? Let us know your opinion in the comments below!
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