Stocks in the News is produced by Ransom Notes Radio and Goodfellow, LLC. Crista Huff manages Goodfellow LLC, a website that recommends outperforming stocks using fundamental and technical analysis.
Stock number one is:
Valeant Pharmaceuticals International Inc. , (SYMBOL: VRX) and the headline says:
Valeant’s Bausch & Lomb Buy Another Debt-Fueled Deal – The Wall Street Journal
Valeant Pharmaceuticals, Canada’s largest drugmaker, has agreed to buy privately-held eye-care company Bausch & Lomb Holdings Inc. for $8.7 billion. The deal will be financed by the issuance of new equity and debt. Valeant’s long-term debt ratio was already high at 56%.
Valeant is a rapidly growing specialty drugmaker, in the areas of dermatology, neurology and ophthalmology.
On April 29, we recommended that investors buy Valeant Pharmaceuticals, and the stock has since risen 21%. Despite projected earnings growth of 26% this year, and a PE of 16.2, we believe the company’s high debt levels warrant investor caution.
Our Ransom Note trendline says: STAY ON THE SIDELINES.
Stock number two is:
Tiffany & Company , (SYMBOL: TIF) and the headline says:
First Quarter Earnings Shines Bright Like a Diamond – Citi Research