VRX - time to buy ?

syswizard said:
1) stock once was over $200...albeit overvalued there....now at a fraction of that price
2) new management
3) famous hedge fund manager on the board of directors
4) still in a growth industry
More...

There are good reasons if stock has declined from 200 to 28.
Last year, after a 73% decline, VRX could have been a Buy opportunity when stock traded around 75 dollars and tried to rebound above 100 dollars. Alas, this was a dead cat bounce, and we are still is a bear market.
Don't fight the trend. Too early, no buy signal right now.
Your 4 points were valid 2 months ago, VRX lost half its value since then.

CM
 
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syswizard said:
1) stock once was over $200...albeit overvalued there....now at a fraction of that price
2) new management
3) famous hedge fund manager on the board of directors
4) still in a growth industry
More...
1) Yes... The same logic could have been applied to Lehman, Fannie, etc etc etc.
2) Indeed, although "new" doesn't necessarily mean "better" and/or "different"
3) Well, the historical record of this particular famous hedge fund manager doesn't suggest that his involvement is a guarantee of success.
4) Growth industry? I am not so sure about that. There is an argument that, on an aggregate basis, US drug expenditures are way too high and, more importantly, not effective. If this situation were to correct somehow, this would have implications for the entire industry. In fact, if you look at the performance of something like IBB, you could argue that a higher probability of this outcome is what's being priced in the mkt as we speak.
 
At the end of the day its a view. Either you think they will resolve their debt issues and the stock is an easy double. Or they won't and the stock is a donut. I think they will. But many others do not. So far they have been right.

TYC in 2002, BAC (in 2011), BBY in 2012, AAPL in 1998 were all examples of stocks where the bet was zero or sustainable business where sustainable business won.

In the case of C, BSC, LEH, and FNM bankruptcy won.
 
newwurldmn said:
At the end of the day its a view. Either you think they will resolve their debt issues and the stock is an easy double. Or they won't and the stock is a donut. I think they will. But many others do not. So far they have been right.

TYC in 2002, BAC (in 2011), BBY in 2012, AAPL in 1998 were all examples of stocks where the bet was zero or sustainable business where sustainable business won.

In the case of C, BSC, LEH, and FNM bankruptcy won.
More...
A key difference is that VRX doesnt need improvement of its business or a 'turnaround' of any kind. If the Cash EPS metric is real, the stock is worth a lot. in fact, it could even deterioate further and still be a good buy. If its not real then the stock is worthless. It all comes down to whether Pearson made good buys in the drug portfolio. Who is right, the value investors with good records who met and spoke with Pearson several times (matter of fact, they handpícked him to run the company) or the folks who never spoke to him, are running garage hedge funds out of australia and random blogs?
We will see
 
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newwurldmn said:
At the end of the day its a view. Either you think they will resolve their debt issues and the stock is an easy double. Or they won't and the stock is a donut. I think they will. But many others do not. So far they have been right.

TYC in 2002, BAC (in 2011), BBY in 2012, AAPL in 1998 were all examples of stocks where the bet was zero or sustainable business where sustainable business won.

In the case of C, BSC, LEH, and FNM bankruptcy won.
More...
Yeah, although I am not sure you really meant to include C in the second list...
Daal said:
A key difference is that VRX doesnt need improvement of its business or a 'turnaround' of any kind. If the Cash EPS metric is real, the stock is worth a lot. in fact, it could even deterioate further and still be a good buy. If its not real then the stock is worthless. It all comes down to whether Pearson made good buys in the drug portfolio. Who is right, the value investors with good records who met and spoke with Pearson several times (matter of fact, they handpícked him to run the company) or the folks who never spoke to him, are running garage hedge funds out of australia and random blogs?
We will see
More...
But it appears that the very same value investors with good records that so loved Pearson and hand-picked him to run the company suddenly have fallen out of love with him and got him fired. Wouldn't you say that this is a signal that these guys don't think Pearson did such a good job, including possibly his acquisitions?
 
Martinghoul said:
Yeah, although I am not sure you really meant to include C in the second list...

But it appears that the very same value investors with good records that so loved Pearson and hand-picked him to run the company suddenly have fallen out of love with him and got him fired. Wouldn't you say that this is a signal that these guys don't think Pearson did such a good job, including possibly his acquisitions?
More...
the complaints had more to do with bad PR/communications and too aggressive price hikes rather than bad drug purchases. its the latter that really matters
 
Daal said:
the complaints had more to do with bad PR/communications and too aggressive price hikes rather than bad drug purchases. its the latter that really matters
More...
Could be, although this is one of many possible interpretations...
 
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