Valeant's Effort

In This Issue: Valeant's Effort Another Thoroughbred In Starting Gate Can You Afford These Seven Things? If you consider yourself part of the middle class, you may still be struggling to get by. An article by USA Today recently listed seven things America's average-earning citizens find it challenging to afford. The list included vacations, new vehicles, dental work… and, unfortunately, retirement savings. But it doesn't have to be that way. There's a safe, easy way to make 11% (or more) month after month. They're called Rushmore Plans. The good news is these underrated investments have nothing to do with buying risky penny stocks or complicated options. In fact, when you see exactly what they are – and how simple it is to get rich from them – you'll be amazed. Get the full story here. Valeant's Effort 11/04/2014 By Thomas Scarlett The Canadian pharmaceutical giant Valeant (NYSE: VRX) is involved in a fascinating takeover battle for Allergan Inc. (NYSE: AGN). If it succeeds, and even if it doesn't, Valeant will remain a key company in one of the fastest-growing market sectors around. Allergan is one of the leading makers of Botox, which has been growing by leaps and bounds in recent years. If Valeant is able to add Botox to its existing array of highly regarded pharmaceuticals, it will have a truly dominant market position. The focus of the Montreal-based company is on neurology, dermatology and infectious disease with several drugs in late-stage clinical trials and several currently on the market. In addition, Valeant has a portfolio of more than 500 products from its prior history as a group of specialty chemical and radio-chemical research, development and supply companies with a history stretching back to the 1960's. Valeant sells a wide range of drugs, including over-the counter medications and medical devices, as well as prescription drugs such as the well-known antidepressant Wellbutrin XL. Kinerase, which uses kinetin as active ingredient, is one of its most popular products. An important part of the growth strategy for Valeant has been acquisitions, sometimes in the multi-billion dollar range, of medical and pharmaceutical companies. As of May 2014, the company was valued at $29.5 billion, making it the 17th largest public company in Canada. It's also the largest pharmaceutical company in Canada. You may not have heard of Valeant, but you've almost certainly heard of Bausch & Lomb, the well-known eye care company. Valeant acquired Bausch & Lomb in 2013 and has integrated it well into its existing marketing and production processes. Valeant was founded as a United States business. It has undergone major management, operational and strategic restructurings since the 1990s when shareholders of several group units approved the merger of ICN Pharmaceuticals (founded by Milan Panic), ICN Biomedicals, SPI Pharmaceuticals and Viratek into a new global entity, ICN Pharmaceuticals, the immediate forebear of Valeant. In 2008 the Swedish pharmaceutical company Meda AB bought branches in Western and Eastern Europe from Valeant Pharmaceuticals for $392 million. Valeant expresses its interest in acquiring Allergan in January of this year. In May, Allergan decided against the proposal and voted against the acquisition. Only a few weeks later, around May 28th, Pershing Square Capital manager, Bill Ackman, got onboard and eyed a joint acquisition with Valeant of Allergan. However, as several months went by, no new progress was being made by Ackman and Valeant. In an effort to incite more enthusiasm, Valeant directors sent a letter to Allergan's directors with the proposal of increasing the buyout to be above $200 a share, about 31% higher than its original proposed takeover of $152.88 per share. Unfortunately, there still remains a gridlock and even more so after breaking news that Allergan was approached by a different firm with the interest of acquiring Allergan as well. Valeant recently announced its third quarter financial results for 2014. Total revenue came in at $2.1 billion, an increase of 33% over the prior year. Total same store sales organic growth was 19%, including impact from generics. Earnings per share was $0.81,an increase of 48% over the comparable quarter in the previous year Additionally, the company managed to reduce its net debt to $15.5 billion, with net leverage ratio approximately 4 times adjusted pro forma EBITDA. This financial soundness is what has enable the company to not only fund internal growth but also to go looking for good companies to acquire. "Valeant delivered exceptional results for the third quarter and exceeded our expectations on all key metrics," stated J. Michael Pearson , chairman and chief executive officer. "With our acquisition of Bausch + Lomb now annualized (August 5) and the impact of generics largely behind us, the true strength of our business and operating model can be clearly seen by our financial results. We are particularly pleased to deliver over $600 million in GAAP operating cash flow to our shareholders." The stock price has been fairly volatile in recent months, as the news about the possible acquisition has gone from positive to negative and back again. After falling below 110 during the summer, VRX has now risen above 130 again. But whatever happens with Allergan – and it still seems like a good bet that the merger will eventually happen – Valeant is a proven winner with its existing product line. It's a buy up to 143. Tom Scarlett is an investment analyst with Personal Finance. Stocks Are on Sale in This Country It seems everywhere you look right now, warning signs are flashing about our economy. The Federal Reserve just ended its historic quantitative easing program. Volatility has hit new highs. And a new report from Credit Suisse says the wealth-to-income ratio of Americans has also hit a new high. The last times it came close to the current number were during the Great Depression, in 1999 (right before the dot-com bubble burst) and 2007 (directly prior to the last market crash). The good news is, I've found a safe haven for your hard-earned money. And it's in a country that's enjoyed uninterrupted economic growth for 23 straight years. Best, thanks to a strong U.S. dollar, stocks are currently on sale there. But you need to hurry because that could change in the blink of an eye. Get the details here. Another Thoroughbred In Starting Gate 11/03/2014 By Robert Rapier Back in February, Antero Resources (NYSE: AR) filed an S-1 with the SEC for the initial public offering of an MLP comprised of its midstream assets.The filing indicated that Antero Resources Midstream LLC would be converted into a limited partnership named Antero Midstream Partners LP (to trade under the ticker AM) with a valuation of up to $500 million. But demand for new midstream IPOs has been robust -- as seen most recently by Shell Midstream Partners' (NYSE: SHLX) 45% gain on its first day of trading last week -- and this may have contributed to Antero's decision to upsize the IPO to $750 million. Units are scheduled to begin trading on the NYSE this week. Antero Midstream Partners' assets consist of gathering pipelines and compressor stations moving the natural gas extracted by Antero Resources. These assets are located in the liquids-rich southwestern core of the Marcellus Shale in northwest West Virginia and liquids-rich core of the Utica Shale in southern Ohio. Antero Resources is the most active driller in the Appalachian Basin with 22 operated rigs at present, including 15 operated rigs in the Marcellus Shale (where it is also the most active driller) and seven operated rigs in the Utica Shale. Antero Midstream Partners has secured a long-term, fixed-fee contract agreement covering substantially all of Antero Resources' current and future acreage for gathering and compression services. Antero has also granted its midstream affiliate an option to purchase fresh water distribution systems drawing from the Ohio River and several other sources for well completion operations in the Marcellus and Utica shales. These systems consist of a combination of permanent buried pipelines, portable surface pipelines, fresh water storage facilities and the associated pumping stations. The partnership will also inherit from its parent an option to acquire a stake of up to 20% in the 800-mile Rover Pipeline project planned by Energy Transfer (NYSE: ETP). Antero Resources will own Antero Midstream Partners' general partner and incentive distribution rights. The IPO is expected to distribute 37.5 million units priced between $19 and $21. The initial annualized distribution is projected to be $0.68 per unit, which would provide a midpoint yield of 3.4%. The partnership projects that it will produce $119 million in distributable cash for the twelve months ending September 30, 2015, which would provide 1.15x distribution coverage. This article originally appeared in the MLP Investing Insider column. Never miss an issue. Sign up to receive MLP Investing Insider by email. What North Dakota's Economy Could Do for You In 2013, North Dakota's economy churned out nearly $50 billion. That's twice what it did 11 years ago. And for the most part, it's all due to a massive oil and gas boom taking place there. But it's not just happening in the north central plains. It's happening in Texas. It's happening in the bayous of Louisiana, too. The energy boom has even hit the foothills of Pennsylvania. I've found five surprising ways to profit from this stunning American success story. I'll give the lucrative details here. You are receiving this email at benjamart.ss.stock@blogger.com as part of your subscription to Investing Daily's Stocks To Watch, published by Investing Daily. To ensure delivery directly to your inbox, please add postoffice@investingdaily.com to your address book today. Email Preferences | About Us | Premium Services | Contact Us | Privacy Policy Copyright 2014 Investing Daily. All rights reserved. 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