Valeant Pharmaceuticals (VRX) Stock: Take A Play Out Of The Buffett Playbook


Valeant Pharmaceuticals Intl Inc (NYSE: VRX)

Valeant Pharmaceuticals is in the middle of one hell of a debate at the moment. As we know, about a year ago the company was caught in the midst of a scandal with a pharmacy known as Philidor. So, the term Philidor Scandal has been dubbed. Now, the fear is high while debates surrounding the company’s future swirl around the internet. So, what’s the deal? Is this an opportunity in the making? I think yes! Today, we’ll talk about why I see opportunity when I see VRX.

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It’s Time To Play The Buffet Game With VRX

Warren Buffett is a huge name in investing, and for good reason. The guy is an absolute genius that can turn pennies into dollars and dollars into millions! One of the lessons that he has taught the investing community is that sometimes risk is a good thing and that timing is everything. This is often interpreted by saying buy when fear is high and sell when greed is high. Well, when it comes to Valeant Pharmaceuticals, the fear is high.

Taking This A Step Further

Now keep in mind, Warren Buffet is not a dumb guy that struck it rich on a couple of good trades. Even if fear is high, he isn’t buying if there is no potential for massive gains in the future. In my opinion, that’s what makes VRX the perfect target for a Buffet-style profit play.

Think about it, the company’s stock has plummeted. In July of last year, the stock hit a peak at more than $257 per share. Currently (1:42), the stock is trading at $23.81, and that’s after some gains. Of course, the scandal was the reason for the declines. However, I believe that fears have gone far past realistic.

At this point, VRX really is an entirely different company in the way they operate. They’ve got new management, new strategies, and new concepts. However, the company still has the same smash-hit treatments that it had in the past. If any other company had a line up of products that was so impressive matched with an incredibly strong pipeline, we would see a much higher price. However, due to fears of legal actions coming down the line, investors are keeping the stock far lower than it should be at the moment.

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This Is Creating One Heck Of An Opportunity!

While Valeant Pharmaceuticals may seem like something you would want to avoid like the plague, the truth is that there’s huge opportunity here. At the end of the day, I understand that the company was in the wrong, and a couple of years down the road it’s likely to be hit with big settlements as a result. However, at the moment, the company has plenty of time to prepare for the impending legal blues.

In the mean time, the opportunity surrounding the stock is incredible. VRX has been working to bring value back to shareholders through new agreements, leading to stronger product sales. Not to mention, the pipeline the company is working on is incredible and will likely lead to strong gains ahead. While in the short run this may be a risky play, I’m expecting to see big gains out of VRX in the long run.

What Do You Think?

Where do you think VRX is headed?

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