Market Overview

Valeant Bull Case ($70?) Is Now All About The Next CEO

Valeant Bull Case $70? Is Now All About The Next CEO
Related VRX
Benzinga's Bulls & Bears Of The Week: Amazon, Costco, Netflix, Tesla And More
Dear Activists: Buying Stock Can Effect More Change Than Selling It
Phoenix Investment Adviser LLC Buys AMC Entertainment Holdings Inc, Dorian LPG, Alliance One ... (GuruFocus)

On Wednesday morning's PreMarket Prep, Rand Strategic Partners’ Todd Sullivan discussed how traders should approach the controversial Valeant Pharmaceuticals Intl Inc (NYSE: VRX). Shares are down 83.5 percent in the past year, but investors are divided on whether or not the stock will eventually go to zero or whether the sell-off has created an incredible buying opportunity.

Sullivan told Benzinga the fate of Valeant rests in the hands of the company’s next CEO.

“If they come up with a great CEO, I think the stock could be a screaming buy simply because it is a healthy, functioning company. Yes, there’s a ton of negative press around it, and a rockstar CEO could help handle a lot of that.”

Related Link: Ackman Talks Up His Long Position In Valeant And The Street Responds

Although the market seems concerned about Valeant’s debt load and the potential for default, Sullivan believes the stock is trading at a very compelling valuation.

“Fundamentally speaking, there’s no reason for the stock to be down at this level. If you just look at valuation based on whatever metric you want to look at –EBITDA, earnings, sales, whatever- it’s trading at a fraction of what its peers are trading at.”

It terms of timing a buy, Sullivan says he’s on the sidelines until a CEO announcement is made and will willingly pay a slightly higher price if the company comes through with a strong leader.

“With a good CEO, this thing could go from $27 to $70 over the next couple of years,” he concluded.

For more trading ideas and insight on daytrading check out PreMarket Prep LIVE every morning from 8-9:30 a.m. ET here. You can also listen to complete episodes on Soundcloud, iTunes and Stitcher.

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for VRX

Mar 2018Deutsche BankUpgradesHoldBuy
Jan 2018Goldman SachsInitiates Coverage OnSell
Dec 2017JP MorganDowngradesNeutralUnderweight

View More Analyst Ratings for VRX
View the Latest Analyst Ratings

Posted-In: PreMarket PrepAnalyst Color Biotech Top Stories Exclusives Analyst Ratings Interview General Best of Benzinga


Related Articles (VRX)

View Comments and Join the Discussion!