Valeant Pharmaceuticals International (VRX) Hits New Lifetime High

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Valeant Pharmaceuticals International ( VRX) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Valeant Pharmaceuticals International as such a stock due to the following factors:

  • VRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $162.1 million.
  • VRX has traded 3.3 million shares today.
  • VRX is trading at a new lifetime high.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in VRX with the Ticky from Trade-Ideas. See the FREE profile for VRX NOW at Trade-Ideas

More details on VRX:

Valeant Pharmaceuticals International, Inc., a specialty pharmaceutical company, develops, manufactures, and markets pharmaceutical products and medical devices in the areas of neurology, dermatology, and branded generics. The stock currently has a dividend yield of 0.9%. Currently there are 8 analysts that rate Valeant Pharmaceuticals International a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Valeant Pharmaceuticals International has been 1.1 million shares per day over the past 30 days. Valeant Pharmaceuticals International has a market cap of $39.0 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.33 and a short float of 2% with 3.34 days to cover. Shares are down 4.1% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Valeant Pharmaceuticals International as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and generally higher debt management risk.

Highlights from the ratings report include:
  • VRX's very impressive revenue growth greatly exceeded the industry average of 2.5%. Since the same quarter one year prior, revenues leaped by 74.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, VRX's share price has jumped by 92.55%, exceeding the performance of the broader market during that same time frame. Although VRX had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • Net operating cash flow has increased to $201.71 million or 20.91% when compared to the same quarter last year. Despite an increase in cash flow, VALEANT PHARMACEUTICALS INTL's average is still marginally south of the industry average growth rate of 29.85%.
  • The debt-to-equity ratio is very high at 3.52 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, VRX maintains a poor quick ratio of 0.78, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market, VALEANT PHARMACEUTICALS INTL's return on equity significantly trails that of both the industry average and the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
null

If you liked this article you might like

Follow the Crucial '$20 Level Rule' When Trading Stocks

$20 Should Be Your Cutoff Point

Short the Stocks That Fall Below $20

One of the Most Recognized Hedge Fund Managers Has Had a Terrible Year

Beleaguered Hedge Fund Titan Bill Ackman Is Having Another Rough Year