RE:RE:RE:RE:RE:RE:RE:Concordia Healthcare: Baby Valeant, More like Baby Majin Buu Hi CJ. My apologies per the misunderstanding. We are a research wing of SurgeTraders. A disclaimer follows our report.
We have actually updated our model (DCF + Comps) to account for less acquisitions. We have kept EBITDA margin stable at 85% (We think 91% is way too high and possibly unsustainable).
We upgrade CXR-T to 63 pps for our baseline assuming a pessimistic revenue of only 500M. We can see 80$, but we would need to see Concordia fix the cyclicality of their Q1 ER, first. We are long the stock and think it has tremendous upside, even for a dividend paying stock (though that is minor). We have been long the stock since the Valeant + AMCO debt induced crash. Our average is 32$.
Why is CXR no Baby-Valeant, and a far better company?
We didn't really answer that in our first report. The answer to this question is simple: Concordia's products are no-nonsense hospital, pedaetric, and traditional products, which are used more often in hospitals than not. This is including the AMCO portfolio. This, no-nonsense product portfolio combined with the channels that CXR has, make the company significantly different.
That is significant, because it means Concordia can just widen channels through the help of Cardinal and other distributors abroad to grow organically. Something VRX will have to figure out. CXR has only hiked prices significantly in one product. The Roche generic( 6000 brand name, vs 600 CXR).
CXR is also working on R&D, we hope that will be in the result of SR and XR formulations of existing, homerun drugs.
Finally, we look to other granular elements that Concordia has improved: When we initially did our DD on the stock, we noticed that all of the Concordia products' websites were reminiscent of geocities and angelfire (very low quality). Over the weekend we saw a huge facelift in Donnatal, Ulefsia, and Orapred. So the company is going full steam ahead in marketing its winners, as well as linking on AMCO.
We will post our updated model within the week. Btw, the CEO just bought a lot :)