Will Valeant (VRX) Stock Fall as Sequoia Fund Exits Stake?
NEW YORK (TheStreet) -- Shares of Valeant Pharmaceuticals (VRX) are up 0.99% to $23.45 in pre-market trading on Wednesday even though mutual fund Sequoiadisclosed late yesterday that it exited its stake in the beleaguered drugmaker last month.
Valeant once accounted for more than 30% of Sequoia's portfolio.
"Valeant was our largest position to start the year and its 80% decline through June 30 badly penalized our results," the fund's investment committee said in a letter to shareholders.
The stock plummeted last year as Valeant was scrutinized for its business and accounting practices.
The investment firm that runs Sequoia, Ruane, Cunniff & Goldfarb, is known for its ties to Berkshire Hathaway's (BRK.A, BRK.B) Warren Buffett, who led many of his early investors to the firm, according to the Wall Street Journal.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
Valeant's weaknesses include its deteriorating net income, generally high debt management risk, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
You can view the full analysis from the report here: VRX
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.