NEW YORK (TheStreet) --LMM Investments chairman and famed investor Bill Miller defended his position in what he called the "most toxic" stock on the market, Valeant Pharmaceuticals.  (VRX)

"It's blown a hole in [Bill] Ackman's portfolio. It cost Bob Goldfarb, one of the great investors of our generation, his job, it's trading in the low $20s but, we just bought more last week," Miller said.

Valeant, Miller explained, is currently working to fix two significant issues.

"One of them being a legacy issue of Mike Pierce, you have a new CEO, CFO, and business strategy at Valeant, and then the debt load. The debt is $31 billion," he added.

Despite the headwinds, Valeant's free cash flow is what keeps Miller invested in the stock. Valeant's free cash flow of $2.5 billion to $3 billion on a market cap of $8 billion equates to a 25%-35% free cash flow yield.

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"So just on free cash flow alone, plus the $8 billion of proceeds they think they can get from selling non-core assets, we think the stock doubles in three years," Miller noted.

Shares of Valeant Pharmaceuticals were lower in mid-afternoon trading on Monday.

Separately, 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 articles's author.

TheStreet Ratings rated this stock as a "sell" with a ratings score of D.

The company's weaknesses can be seen in multiple areas, such as 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

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