Investors looking for deep value opportunities often have to look in the "discard bin" at companies which were former darlings which have fallen out of favor with the broader market. Perhaps no better description could encompass the beaten up former pharmaceutical mega-giant Valeant Pharmaceuticals International Inc. (TSX:VRX)(NYSE:VRX), a company which has fallen from grace in a manner which only a few companies have in recent years.
Valeant’s share price has begun to rebound, as investors look forward to growth prospects with a company which has done nothing but see top and bottom line declines in recent years.
This past quarter, the company noted organic growth for the first time in a long time, driven mainly by the company’s Bausch + Lomb segment, which has outperformed in recent quarters. Outperformance in the company’s core business segment has led to an announcement that Valeant’s management team will indeed be moving to change its name to Bausch Health Companies in July, a move which is expected to remove much of the negative stigma associated with Valeant’s current name and the scandal which has hampered the company’s stock price for the past three years.
On a fundamental basis, Valeant is trading at a multiple which is very attractive compared to its peers. The company’s management team has done an excellent job of paying down debt and bolstering the firm’s balance sheet, moves which should serve shareholders well in the future.
While Valeant/Bausch may not be out of the woods yet, this is certainly a good start.
Invest wisely, my friends.
