November 7, 2016

Valeant Pharmaceuticals facing many headwinds

A while ago, in my initial negative assessment of Valeant Pharmaceuticals, I concluded with the following strongly expressed and cautionary messages:
"I believe that at best, Valeant's planned asset sales will yield demonstrably lower earnings power than the current consensus calls for. I think these sales will also lead to formidable asset-impairment charges. And, at worst, I think Valeant could fail ... and that its share price could fall to zero."

Jim "El Capitan" Cramer and I often (respectfully) disagree on many market subjects. But, for some time, we have consistently been in total agreement on the dismal prospects for Valeant.

Jimmy re-emphasized his ursine view of VRX in a succinct analysis, "With The Election Coming, Valeant's Problem is Increasing."

I would continue to avoid the shares of Valeant as I do not see how the company can overcome the political, financial, operating, balance sheet and other company-specific headwinds facing it.
Position: Short BRK.B small