Considering it costs $2.5 to $5 Billion from the initial Research phase to bringing a new drug to market, the $32 Billion in VRX Debt given their other assets, and proven drug portfolio makes this stock look cheap here on a valuation basis.
I bet I could find a buyer willing to pay $50 a share for Valeant Pharmaceuticals over the weekend if Bill Ackman wasn`t in such a hole on this stock, and needs a much higher price given the average stock price on his accumulated share stake.
Given that there is going to be further consolidation in this space, and the high costs associated with organically generating new drugs for the marketplace with no guarantees of success - VRX looks like an attractive take-out candidate to me. Their debt is actually in line with many utilities trading at much higher valuations with much lower revenue generation capabilities from both an overall margins and gross profit standpoint.
The surprise Brexit event made for some fun trading with great price action opportunities last night - sort of like being in a hurricane without getting your house destroyed - there is something "energy" in the air.
Sri Lanka's central bank left its key policy rates steady, as expected, saying growth in the first quarter was broadly in line with expectations while inflation is expected to ease and remain in mid-single digits in the medium term.
The Central Bank of Sri Lanka last raised its key rates, the Standing Deposit Facility Rate (SDRF) and the Standing Lending Facility Rate (SLFR), by 50 basis points in February to 6.50 percent and 8.0 percent, respectively.
Sri Lanka's inflation rate picked up speed in May to 4.8 percent from 3.1 percent in April, an acceleration that was expected due to May's increase in Value Added Tax (VAT) to 15 percent from 11 percent and the removal of certain exemptions to raise government revenue.
The International Monetary Fund (IMF) - which earlier this month approved aid of US$1.5 billion, with immediate payment of $168.1 million, to help Sri Lanka meet balance of payment needs until it can adjust its macroeconomic policies - forecasts average inflation this year of 4.1 percent, up from 0.9 percent in 2015.
For 2017 the IMF sees inflation rising to 5.3 percent before easing to 5.1 percent in 2018, 5 percent in 2019 and the same in 2020.
Although Sri Lanka's economy expanded by an annual rate of 5.5 percent in the first quarter of the year, up from 2.5 percent in the previous quarter, the IMF said the economy was beginning to show signs of strain from the weak external environment and the challenges of policy adjustment.
The IMF forecasts annual growth of 5.0 percent this year and the following two years compared with 4.8 percent last year.
The linchpin of the IMF-led reform program is a reduction in Sri Lanka's fiscal deficit to 3.5 percent of Gross Domestic Product by 2020 from 6.9 percent in 2015 by rebuilding tax revenues, controlling expenditures and putting state enterprises on a more commercial footing.
Revenue last year rose 1.5 percentage points to 13.1 percent of GDP, but this was mainly due to one-off measures and taxes from a temporary surge in vehicle imports. Meanwhile, expenditures rose by 2.1 points to 19.9 percent of GDP.
The IMF also wants Sri Lanka to commit itself to a flexible exchange rate that will enable it to adjust to external forces and allow the central bank to rebuild foreign exchange reserves and focus more closely on price stability.
Sri Lanka's rupee has been facing downward pressure for months due to capital outflows and has been depreciating steadily since late August until early this month when market sentiment improved following the IMF's approval of the Extended Fund Facility (EFF), which the central bank expects should help strengthen the country's external position.
The rupee was trading at 146.6 to the U.S. dollar today, down 1.7 percent this year.
Sri Lankan shares have been also been under pressure recently, with the benchmark Colombo index hitting its lowest close in two months on Thursday in response to a downwards revision of Sri Lanka's outlook to negative from stable by Moody's and a government proposal from June 15 to reintroduce capital gains, especially on land sales.
The Central Bank of Sri Lanka issued the following statement:
This is one of the Few times in financial market history that analysts could with high probability predict a black swan market event. The Federal Reserve is going to lose a lot of money on their Bond Portfolio Holdings over the next 10 years.
We discuss the topic of the Diversity Discussions that have been so prominent in the media lately from a meta analysis perspective.
Ukraine's central bank continued to roll back its high interest rates by cutting its policy rate by 150 basis points to 16.50 percent and said it would "proceed with monetary policy easing to support the recovery of economic activity when it is not in conflict with achievement of inflation targets."
The National Bank of Ukraine (NBU) has now lowered its key rate by 550 basis points this year and by 13.50 percentage points since starting the easing cycle in August 2015.
From April 2014 through March 2015 the NBU hiked its rate by a total of 23.5 percentage points, with the key rate topping out at 30.0 percent to support the exchange rate of the hryvnia and prevent inflation from getting out of control.
Inflation in May fell further to 7.5 percent from 9.8 percent in April, in line with the central bank's projections, and a far cry from an inflation rate of 60.9 percent in April last year.
The deceleration in headline inflation is due to a strengthening of the hryvinia's exchange rate, improved commodity prices and better food supply, while there is "insignificant" upward pressure from demand, the central bank said.
The rise of the hryvnia along with the sustained slowdown in inflation has also triggered a "significant decrease" in inflation expectations, with the NBU expecting headline inflation to reach its target of 12 percent, plus/minus 3 percentage points, by the end of this year and then 8.0 percent, plus/minus 2 percentage points, by the end of 2017.
By late 2019 the central bank is targeting inflation of 5.0 percent.
One of the reasons that inflation will pick up in the second half of this year is due to higher tariffs for public utilities, but the central bank said it has already taken this into account so it will not require a response by monetary policy.
The hryvnia came under severe pressure in February 2014 following political unrest, the annexation of Crimea by Russia and armed conflict in Eastern Ukraine. Last year it lost 24 percent against the U.S. dollar although capital controls and rate hikes by the central bank slowed its fall.
The hryvnia started out the year on a weak footing but since mid-March it has been rising and was trading at 24.8 to the dollar today, marginally down from 24.0 at the start of this year.
A delay in a third tranche of funds from the International Monetary Fund under its $17.5 billion bailout program is keeping investors on the sidelines and the central bank said earlier this month the country risks damaging its reputation and economic stability if it fails to push through reforms that aim to limit the power of vested interests and modernize the economy.
The IMF is expected to decide on disbursing the aid next month.
The National Bank of Ukraine issued the following statement:
The central bank of the Philippines left its new policy rate, the rate on its overnight reverse repurchase facility (RRP), unchanged at 3.0 percent, along with the other new rates that form the upper and lower bound of its interest rate corridor (IRC) that took effect on June 3.
Bangko Sentral ng Pilipinas (BSP) said today's decision by its monetary board was based on the view that inflation continues to be manageable - a phrase often used by the BSP - with the latest forecast showing that inflation is likely to settle near the lower end of its target range this year and rise to the midpoint in 2017 and 2018.
This forecast compares with its statement in May that inflation should settle within its target range this year and 2017. Last month it acknowledged that expectations had declined slightly.
The BSP, which targets inflation of 3.0 percent, plus/minus 1 percentage point, said the overall balance of risks surrounding its inflation outlook was now deemed to be "broadly balanced," an improvement from last month when the risks were tilted to the downside.
In addition to the recent recovery of oil prices, the BSP said improved rainfall should ease the upside risks to food and utility prices in coming months, although pending petitions for higher electricity rates remain an upside risk.
But while the new information supports keeping rates steady, the BSP also said the continued uncertainty surrounding monetary policy in major advanced countries "requires a steady hand on policy settings in order to retain flexibility in the period ahead."
The central bank introduced its new rate structure to improve the transmission of its policy to money markets and financial markets.
The IRC comprises an overnight lending facility (OLF) that forms the upper bound of the rate corridor. This rate is 3.50 percent. The lower bound is comprised of the overnight deposit facility (ODF), which is set at 2.5 percent.
The RRP is the central bank's benchmark rate and was cut to the current level of 3.0 percent from a previous 4.0 percent as part of the change. RRP is set in the middle of the rate corridor.
Bangko Sentral ng Pilipinas issued the following statement:
Norway's central bank maintained its key policy rate at 0.50 percent, saying that its forecast for the policy rate was little changed since March and "there are still prospects that the key policy rate may be reduced in the course of the year."
Norges Bank, which cut its rate by 25 basis points in March, added that growth was likely to remain weak and inflation, which has been higher than 2.5 percent target, should ease due to lower wage growth and a somewhat stronger krone.
In an update to its quarterly monetary policy report, Norges Bank maintained its forecast for the key policy rate to average 0.5 percent this year but for 2017 it raised it slightly to 0.3 percent from 0.2 percent forecast in the March report.
For 2018 the policy rate forecast was also raised to 0.3 percent from 0.2 percent and for 2019 the forecast was raised to 0.6 percent from 0.5 percent.
The central bank also raised its inflation forecast for this year to 3.3 percent from 3.1 percent forecast in March but lowered the 2017 forecast to 2.2 percent from 2.3 percent.
For 2018 inflation is seen easing further to 1.9 percent from 2.1 percent previously seen and for 2019 to 1.7 percent, unchanged from March.
The 2016 forecast for growth in mainland Norway was unchanged at 0.8 percent while the 2017 forecast was lowered to 1.6 percent from 1.8 percent.
For 2018 and 2019 growth was seen picking up to 2.1 percent and 2.3 percent, respectively, below the March forecast of 2.3 percent and 2.5 percent respectively.
The central bank again voiced its concern over the rise in Norwegian home prices, saying vulnerabilities may increase if the rapid rise in house prices persists.
The countercyclical capital buffer for banks is set to rise to 1.5 percent on June 30 from 1.0 percent following earlier recommendations by the central bank to the finance ministry, which decides on the buffer every quarter.
The buffer aims to strengthen the financial soundness of banks and their resilience to loan losses in a future downturn. The central bank's assessment of financial imbalances is based on credit-to-GDP ratios and credit has been expanding faster than economic growth for a while.
While the growth of credit has eased in recent quarters, economic growth has declined so the ratio of credit has risen, and house prices have continued to accelerate, a sign that financial imbalances are building up.
Norway's economy expanded by an annual rate of 0.7 percent in the first quarter of this year, up from 0.1 percent in the previous quarter while headline inflation was 3.4 percent in May, up from 3.2 percent in April.
Earlier this month, Norway's Finance Ministery Siv Jensen told reporters that fiscal policy is now helping support the economy after monetary policy had done its job. In May the government said it would use 206 billion kroner of its oil income to help stimulate the economy by 1.1 percentage point.
The exchange rate of Norway's krone typically fluctuates with crude oil prices and since mid-January it has been firming following a decline since mid-2014.
The krone firmed further today following the central bank's decision, quoted at 9.29 to the U.S. dollar compared with 9.35 yesterday and 9.60 a the start of the year for a 3.3 percent appreciation this year.
Norges Bank issued the following statement:
Colombia's central bank raised its policy rate for the 10 consecutive month and reiterated its statement from May that it must ensure that the recent shocks to inflation remain temporary and inflation converges towards its target in 2017.
The Central Bank of Colombia raised its policy rate by another 25 basis points to 7.50 percent, as expected, and has now raised it by 300 points since embarking on a tightening cycle in September 2015. This year it has raised its key rate by 175 points.
"Increases in food prices and the pass-through of nominal depreciation to consumer prices continue to exert inflationary pressures," the central bank said, showing little inclination to pause in its tightening campaign.
Colombia's headline inflation rate rose to 8.2 percent in May from 7.93 percent in April, with the central bank again noting that the impact of the El Nino weather pattern on food prices and the magnitude of the depreciation of the peso had moved inflation and inflation expectations away from its target and also triggered indexation mechanisms.
But core inflation eased to 6.55 percent in May from 6.69 percent and expectations embedded in public debt bonds for 2, 3 and 5 years eased to 4.0 percent and 4.5 percent from 4.3 percent and 4.7 percent in May.
The central bank targets inflation of 3.0 percent, plus/minus 1 percentage point, and Colombia's government earlier this month raised its inflation forecast for this year to 6.5 percent.
Colombia's economy has been slowed by low oil and commodity prices with annual growth the first quarter of 2.5 percent down from 3.4 percent in the previous quarter as domestic demand slowed less than expected.
The central bank said its staff had retained its growth forecast of between 1.5 and 3.2 percent, with 2.5 percent as the most likely figure.
The Central Bank of Colombia issued the following statement: