Valeant Pharmaceuticals (VRX) Stock: Why This Isn’t Such A Bad Investment

Valeant Pharmaceuticals Intl Inc (NYSE: VRX)

Valeant Pharmaceuticals has had a rough time in the market as of late, and for good reason. Late last year, Citron published a report on the company and its relationship with an underground pharmacy known as Philidor. Since then, everything seemed to fall apart for the company as investors, analysts, and reporters questioned its dealings. As a result, the stock tanked dramatically. At this point, many are still holding onto the idea that VRX may be a bad investment, but is it? Today I’ll explain what we’ve seen since the Philidor issue and what I expect to see moving forward.

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VRX Since The Philidor Issue

Valeant Pharmaceuticals has had a tough time in the market over the past several months. When Citron published the article explaining the relationship between the company and the pharmacy known as Philidor, investors lost faith. After all, Citron did call VRX the Enron of the pharmaceutical industry. As a result of the publication, investors started to ask a ton of questions, many of which went relatively unanswered. Soon enough, investors started to push for the cancellation of the agreement between VRX and Philidor, which of course, they got!

This led to a new problem for Valeant Pharmaceuticals. You see, Philidor just so happened to be the biggest customer that VRX had on the books. So, when Valeant cut Philidor out, they also cut out a massive amount of prescriptions for their treatments. Essentially, the company was stuck between a rock and a hard place, trying to figure a way out.

Shortly after the relationship between VRX and Philidor came to an end, we started to see a bit of good news from the company. Soon, Valeant signed an agreement with one of the world’s largest pharmacies, Walgreens. Under the agreement, Walgreens would sell Valeant’s products. While this wouldn’t make up the total prescriptions lost from the Philidor issue, this was a step in the right direction. Since then, we’ve seen several changes to the company, including management changes.

What We’re Seeing In The Market

As mentioned above, during the Philidor issue, VRX started to fall dramatically in the market. The company simply couldn’t seem to find support. However, more recently, we’ve started to see gains on the stock. In fact, today, the gains were continuing in early morning trading. Unfortunately however, the stock has fallen into the red for the day. Currently (10:24), VRX is trading at $28.96 per share after a loss of $0.02 per share or 0.07% thus far today.

What We Can Expect To See Moving Forward

While several analysts have a relatively bearish opinion of what we can expect to see from Valeant Pharmaceuticals, my opinion on the stock is very different. The reality is that VRX has fallen from well over $100 per share to under $30 per share. While we have seen declines, we’ve also seen that since this issue happened, the company is recovering large amounts of sales. At this point, I believe that VRX has fallen to a key level at which it seems advantageous to get involved in the stock again. From here, I’m expecting to see growth; while it may be relatively slow in the beginning, I’m expecting to see growth nonetheless.

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What Do You Think?

Where do you think VRX is headed moving forward and why? Let us know your opinion in the comments below!

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