Concordia Healthcare Corp. T.CXR.R

Can't see the forest for the trees

[DrCalmDown]

Don't put too much emphasis on the August 12th earning report. Generic drugs will always be in demand, and the demand will only increase in the next decade, as the baby boomers step into their 70s and 80s, people continue to live longer, and globle population keeps growing.

On August 12th, if the SP goes up dramatically, sell some shares to prevent overweighting. If SP drops by a significant amount, it's another great oppertunity to invest in a company with good long term prospect. If nothing happens, simply hold onto your shares and enjoy the close to 2% dividend, which is not too bad in today's low interest environment. 

Some thoughts about the shorts. There is no doubt that shorting can make a huge profit. The 2015 movie, "The Big Short" is a good example illustrating the success of such strategy. However, a strategy that produce a Win-Lose situation always has its downside. In the movie, Michael Burry and Mark Baum did make a huge profit shorting the US housing market. However, none of them were truly happy about what they have accomplished.

Seek Win-Win. This is one of the fundimental principles in investing and in life. Invest in companies that you believe will make a positive change and better people's life. When money is made this way, you actually feel good. Hence, I don't endorse shorting, using the Win-Lose strategy may let you win a few battles, but you always lose the war.

Thoughts on CXR's debt. There is no doubt CXR has a lot of debt, total debt/equity ratio is ~3. CXR is ~4 billion in debt, and its asset generates ~400-600 million annually. To me, this is like a 400K house (bought with mortgage) producing 30-60K rent annually (10-15%). I don't see any risk of defaulting. Plus, the revenue is expected to increase in the future, given our aging population.

For better or for worse, I am looking forward to August 12th. GLTA.

[CNInvesting]

You see that's the problem. You talk about perspective but you're biased because of your investment in the company. You're absolutely right that life expectency is higher every year and that generics will remain a big part of the pharma industry going forward. Just what exactly makes you certain that Concordia will be part of that industry in the future ? It's ironic that you talk

[BuyingNow]

AWESOME AWESOME post by CNInvesting.   I have to hand it to you, you nailed it on this one.

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[CNInvesting]

Well I don't think much of the short's quietness in the past days. I guess they don't have anything else to say at this point. I don't know if McCreath and Donville are still long, which could explain why they didn't say anything. It could also be that they don't have anything else to say either and are adding shares. Can anyone here verify that ? Their funds are private

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[CNInvesting]

I'm not saying it's impossible, but I don't see it though.

[select1011]

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[LatticelnExile]

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[wallop13]

If you look at the big picture, drug companies are good for society. It's easy to attack a company for charging too much for a drug, or for the fact that they do little or no research. If you take a step back and look at the overall accomplishments drug companies have made in the medical field it's clear to me that I would not want a world without them. Even Concordia, doing little to no

[CNInvesting]

I don't invest based on morality or what the companies do for society. The markets are amoral in this regard and it's about the best capital allocation. Sometimes the positive effect a company can have on the world with its operations is a very big factor in making an investment decision, and on valuating such a business. Other times, we have companies that are good until they're not

[wallop13]

I personally like value. Let's say 2 auto sales businesses make the same amount of money. But I can buy a used vehicle sales lot for half the price of a new vehicle sales lot. I'll buy the used vehicle sales lot. I know they don't manufacture the automobiles and they buy many of their used autos from the big boys, but they are the better business because of the valuation. I view CXR

[CNInvesting]

Well at this point, your thesis is made and your money where your mouth is. Just remember never to fall in love with your investments. GL to you.

[wallop13]

lol. No love in investing for me. Only numbers. If I don't see a path to growing my numbers I'm gone.

[select1011]

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[select1011]

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[wallop13]

That's true. But companies like Concordia provide liquidity to the drug rights market. Liquidity makes the market work. Less liquidity would decrease productivity/innovation. Some companies develop drugs with the sole intention to sell that drug. Concordia buying these drugs is good for drug innovation. Those drugs may never of been produced had their been no clear exit strategy. As a consumer

[select1011]

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[wallop13]

I actually like AMCO. I think the risk is low there. You have a couple hundred drugs making about 1M a piece. No one will be interested in competing with those drugs, it's just not worth it. Was AMCO worth 13x? I don't know. But at this point I'm getting it for 7.5X and that seems pretty good.