Concordia Healthcare Corp. T.CXR.R

Opinion on Cross Currency Swap

[ryehigh2014]

Aug 15: Cross Currency Swap: 382MM -> 297MM GBP

New Swap: 350MM -> 286MM GBP

They've hedged their entire GBP earnings amounts at 1.255 GBP/USD. Now lets look at the macro environment:
- Rising US Rates = Strengthing Dollar
- Brexit = Weakening Sterling
- Brexit Uncertainty = 5 Years

Is this a good move? Time will tell - I agree with Craigbad and others that they should've been proactive instead of reactive. (a little late). Although weighing against the macro environment this is a short term positive. 

I sense new management coming in - still no position until after earnings (i might miss a pop or be lucky).

[Nossy45]

Yes I believe the logic is that while US rates are likely to go higher, and streghten sterling is going to do the inverse. I imagine the UK, with its exposure to the Eurozone economy will have lower interests rates than the US for the next 5 years. In the long run, this should reduce the cost of the debt.

[cg16]

Rye, I read a report from Scotia that came out yesterday and they reiterate $4.50 TP and sector perform. They said they expect $203m Rev ($58m from US), $115m adj ebitda, and $.91 adj EPS.. they did say that risk is on the downside.. they think the concensus is abit too high ($207m, $123m, $1.04).  seems to me the share price this week is already saying that results aren't good.

[ryehigh2014]

Yeah - to be very honest modeling concordia is a nightmare because of how careful you have to be. It became worst after Brexit. They simply grew too fast. This is the first year they have had to integrate the businesses and report uniform earnings. They kinda have to slug through.  Right now its in the air. I think this is an undervalued gem, but im cautiously waiting until after Q3

[rad10]

Is this another long winded and rather verbose way of stating that you haven't got a clue?

[Craigbad]

No one knows the true impact of the UK bill that is likely to pass in the spring. After watching the parliamentary proceedings I can say that the company and its subsidiaries were named several times. I would find it shocking if any fund managers that could actually move the stock and actually hold it for any length of time would ever touch this now. The market is forward looking, with the

[ryehigh2014]

Craig For the most part I agree. They will have to roll back drug prices. And the parliament might make them a scape goat however I saw the second reading it seemed pretty flat. BUT the business model will be closed.  I think in the new year we'll see new interest. I read today SPROTT exited entirely bu the had a ~300k share position (5MM).  Overall I'm eager for Q3 - I want