Concordia Healthcare Corp. T.CXR.R

CXR:A Top Pick from Davis Rea's John O'connell:

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John O'Connell is chairman and CEO of Davis Rea. His focus is North American large caps.

Top Picks:

Concordia Healthcare (CXRX.O)

Concordia is a Canadian pharmaceutical company that owns and markets a variety of drugs. It has been painted with the same brush as another Canadian pharmaceutical company, Valeant, but is not plagued with any of the same issues. Concordia has recently announced the formation of a committee to review strategic alternatives, and rumours have been swirling about a potential buyout.

Market Call Tonight: Top Picks from Davis Rea's John O'Connell (BNN Video)

Independent of all the noise, the company is still well run, in good financial shape, and has many profitable products in the pipeline. They recently acquired Amdipharm Mercury, which provided them with both a large portfolio of pipeline products, diversification, and exposure to the international market. Despite having to increase leverage to close the deal, the business continues to generate strong free cash flow, which will enable them to pay down debt in a timely manner. It is trading extremely attractively right now relative to both the market and its comparables in the sector, and we believe that it presents a compelling opportunity.