Early Morning Activity Shows Valeant Pharmaceuticals International (VRX) Down

Trade-Ideas LLC identified Valeant Pharmaceuticals International ( VRX) as a pre-market laggard 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 $964.0 million.
  • VRX traded 61,152 shares today in the pre-market hours as of 7:35 AM.
  • VRX is down 10.2% today from yesterday's close.

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More details on VRX:

Valeant Pharmaceuticals International, Inc. develops, manufactures, and markets pharmaceuticals, over-the-counter products, and medical devices worldwide. VRX has a PE ratio of 72. Currently there are 8 analysts that rate Valeant Pharmaceuticals International a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Valeant Pharmaceuticals International has been 3.3 million shares per day over the past 30 days. Valeant Pharmaceuticals International has a market cap of $59.6 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.37 and a short float of 2.6% with 1.17 days to cover. Shares are up 16.3% year-to-date as of the close of trading on Tuesday.

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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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and generally higher debt management risk.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 7.1%. Since the same quarter one year prior, revenues rose by 33.9%. 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.
  • Net operating cash flow has slightly increased to $410.50 million or 9.17% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.57%.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market on the basis of return on equity, VALEANT PHARMACEUTICALS INTL has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 142.1% when compared to the same quarter one year ago, falling from $125.80 million to -$53.00 million.
  • The debt-to-equity ratio is very high at 4.80 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.

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