Valeant Pharmaceuticals (VRX) Stock: Time to Buy?

Valeant Pharmaceuticals Intl Inc (NYSE: VRX)

Valeant Pharmaceuticals is a company that has dealt with quite a few hurdles as of late. Unfortunately, the company has seen its stock fall dramatically over the past several months, and analysts continue to expect further downward movement. However, with everything we’ve seen from VRX since the Philidor scandal, is now really the time to be selling or would it make more sense to buy? Today, we’ll talk about the issues we’ve seen from the company, what we’ve seen since, and what we can expect to see from the stock moving forward.

VRX Has Been Under Fire

As mentioned above, Valeant Pharmaceuticals has dealt with quite a few issues as of late. In late 2015, the company was the center of a report from Citron, an analyst firm that claimed that the company was the Enron of the pharmaceutical industry. Soon independent investigations looking into the company showed some unsavory activity, eventually leading to massive declines in the value of the stock. As the fire started to blaze, investors started to push for a cancellation of the agreement between Philidor and VRX. Of course, when investors want something, companies must listen, as such, VRX canceled its agreement with Philidor.

This led to a new problem. Unfortunately, Philidor was the biggest client that Valeant had on the books. So, when VRX canceled its agreement with the pharmacy, it also threw a big chunk of its sales down the toilet. Even to this day, the declines in sales are hurting the company.

What We’ve Seen From VRX Since

Since the Philidor scandal, we’ve seen quite a bit out of Valeant Pharmaceuticals. The company has been doing everything it can to get things back in order, lifting sales and appeasing investors. So, since the scandal, VRX has undergone major management changes, adding members to the board and announcing a CEO change to come. On top of that, the company has been working full steam to sell its products. That has worked out as well. In fact, VRX recently signed an agreement with Walgreens that would help it to recover on the sales side of things. While Walgreens won’t sell enough product to make up for losses associated with Philidor, it is putting a large dent in the declined sales.

What We’re Seeing In The Market

While VRX declined in a big way following the issues with Philidor, we’re starting to see a change in momentum surrounding the stock. Lately, watching Valeant has been a lot like watching a roller coaster. There have been plenty of downs, but there also have been plenty of ups as well. In fact, today, we’re seeing strong gains in the value of the stock as investors start to change their opinions of the company.

What We Can Expect To See Moving Forward

While there are still several analysts saying that VRX is a bad move at the moment, I don’t think that is the case. The reality is that we’ve seen a tremendous price drop on the company, leading to a valuation that’s seeing strong support in the market. While I do agree that VRX was likely in the wrong, I also have to say that the company is making big strides toward improvement. As a result, I’m expecting to see strong gains in the long run from the stock.

What Do You Think?

Where do you think VRX is headed moving forward and why? Let us know your opinion in the comments below!