27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Shares of Valeant Pharmaceuticals Intl Inc (NYSE: VRX)spiked on Monday and Tuesday trading, driven by news that Citron Research's Andrew Left is now long the stock, following several major changes in the company – although he also disclosed and confirmed to Benzinga the ownership of some out-of-the-money puts, usually used as short investment vehicles.
Related Link: Valeant Spikes After Andrew Left Says He's Long The Stock, Out-Of-Money Puts
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On Tuesday, the analyst appeared on CNBC’s Halftime Report to talk about his long stake in Valeant, but ended up discussing Mallinckrodt PLC (NYSE: MNK) as well, disclosing a short position in the company.
The Latest Target Of Left’s Rage
It seems like Left’s issues with Valeant could be a thing of the past. The new target of the expert’s rage is Mallinckrodt. However, this should come as no surprise, since the investor had called the company the “poster child” for price gouging back in March. “Mallinckrodt makes Valeant look like a bunch of choirboys,” Left told Real Money at the time.
40 percent of the Mallinckrodt’s revenue comes from Acthar, a drug that has not been properly tested, Left assured. The tests were conducted half a decade ago, when all a drug needed was to prove safe, not effective, he explained. “There is no evidence based medicine here,” he stated, suggesting that the company was paying off doctors to prescribe the drug.
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In fact, Left offered (on-air) to donate $1 million of his own money to multiple sclerosis research if the company agreed to test one of its two flagship products.
“If Valeant had done what Mallinckrodt is doing I think they [the Congress] would've taken [Former CEO] Pearson… [and] water boarded him on Guantanamo Bay or something. I mean, this is really bad,” he added.
Mallinckrodt’s Response
After Left appeared on CNBC, Mallinckrodt decided to answer. In a statement, the company assured it “has made great strides in successfully transforming itself into a well-diversified specialty pharmaceutical company that is consistently meeting or exceeding expectations,” citing its most recent quarterly results and guidance as evidence.
“Our growth plan is based on volume. Pricing is a consideration only where a product may be undervalued in the market or to maintain sustainability. Any modest price increases we do take is offset by contracting discounts offered to managed care,” the statement continued – Left told Real Money that he believes this means the company is not planning on lowering prices.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.