Riskier than 99% of companies!

According to GMIRatings:

Valeant Pharmaceuticals Intl Inc is currently rated as having Very
Aggressive Accounting & Governance Risk (AGR®), receiving an AGR
score that places them in the 1st percentile among all companies in North
America rated by GMI, indicating higher accounting and governance risk
than 99% of the other companies.

GOVERNANCE
Metric Name / Metric Relevance AGR Impact
Corporate Governance Events 17.9%

Comp: CEO /CFO Total Comp
Excessively steep compensation increases as one goes up the corporate hierarchy indicate the possibility of senior management exercising undue influence over the Board, and in particular the compensation committee, resulting in compensation policy inconsistent with shareholders' interests.

Comp: Incentive/Total Comp, CEO & CFO
Relatively large incentive compensation in a given period is both a corporate governance red flag and an economic red flag. Large-scale incentive income may indicate that company executives have incentives toward short-term profits and stock gains over the longer-term health of the company. Performance-based compensation can motivate executives to manipulate company books in order to boost earnings and thus increase the value of executive options. Additionally, excess compensation also indicates significant dilution of company stock, income or both, and should be reviewed carefully.

Officer: Chairman is also CEO
Although many exceptional companies are managed at the top by a joint Chairman-CEO, the lack of separation in these positions is cause for concern as a corporate governance choice. Chairman-CEOs represent one of the most extreme cases of lack of independence between a company's Board and its executive officers. All things equal, it is far superior to have fewer insiders on the Board of Directors, particularly in top positions.

Officer: Percent Directors who are Officers
A comparably large percent of board members who are also executive officers is a red flag for lack of board independence. Director positions should be filled with individuals who add value by providing an external perspective based upon their diverse experiences and skills. Boards containing several co-founders may be too consensus-oriented and powerful to allow the CEO to exercise independent judgment. And boards containing family and friends may be lacking in broad business experience and are likely to experience profound conflicts of interest.

ACCOUNTING
Metric Name / Metric Relevance AGR Impact
Revenue Recognition 22.6%

Accounts Receivable/Sales
Unusual increases in accounts receivable relative to revenues may indicate questionable revenues. Large accounts receivable may indicate underreserving for uncollectible or doubtful accounts. High ratios of receivables to sales, particularly in combination with inventory build-ups, underfunded unearned revenue accounts, or other evidence of account manipulation can be indicative of revenue recognition problems.

Unusual Expense/Revenue
Comparably large unusual income is a red flag for non-recurring event risk. Such unusual income is subject to less scrutiny by stock analysts because of its position on the income statement. As a result, corporate managers are tempted to report income of more questionable timing in this category. Analysts should look for signs of chronic reporting of unusual income (or losses), which might more appropriately be reported under operating income (or expense).

Expense Recognition 21.6%

Restructuring Costs/Operating Expense
Restructuring costs offer an opportunity to artificially boost future operating profits. Management may inflate legitimate restructuring charges and create overly large reserves to buffer future earnings. Management can offset legitimate operating expenses against the reserve, thereby showing lower expenses and higher profit in subsequent periods. Management may misclassify items as Extraordinary in an attempt to reflect a particular
trend in the income statement subtotal

Selling G&A Expenses/Operating Expense
Comparably low SG&A expenses is a red flag for expense recognition issues. Management may manipulate these expenses in many ways: through the intentional underaccruing of expenses; by offsetting the expenses against operating expenses in one of the liability "reserve" accounts or by capitalizing SG&A expenses (on the Balance Sheet) instead of recording them as operating expenses.

Prepaid Expenses/Operating Expense
Large prepaid expenses can indicate problems with a company's expense recognition. The company may erroneously capitalize expenses (as "prepaid expenses"), which artificially decreases operating expenses and increases net income.

Asset-Liability Valuation 37.9%

Intangible Assets/Assets
Excessively large intangibles is a red flag for overvalued assets. Elements of intangible assets are particularly difficult to value. In the new economy, the value of companies has been shifting markedly from tangible assets ("bricks and mortar") to intangible assets like intellectual capital and brands. Management may be tempted to overvalue these assets initially or to select a longer than appropriate amortization period in order to improve the look of the balance sheet.

Asset Turnover
Low asset turnovers may indicate potential problems in the efficiency of a company's operations. However, be mindful that as a general rule, companies with high profit margins often have low asset turnover, while those with low margins often have high asset turnover. Overvalued assets may be responsible for a low asset turnover figure.

Goodwill/Total Assets
Large Goodwill is a red flag for potentially overvalued assets. When a company is acquired for more than the value of its fixed assets and intangibles, the buyer records a large amount of goodwill on its balance sheet. In addition, purchase accounting rules allow firms to keep many acquisition costs off the income statement, and as these so-called purchase accounting liabilities are written up, goodwill increases. In future periods, managers of firms that make large or frequent acquisitions often are forced to book impairment expenses on this goodwill.

Liquidity: Cash Ratio
Relatively low cash ratios indicate possibly low liquidity for a company. By only including cash and equivalents, this ratio concentrates on the most liquid assets whose value is fairly certain. It helps answer the question: could the business meet its current obligations with only the cash on hand?

PPE/Assets
Comparably large fixed assets is a red flag for overstated assets. Property, Plant and Equipment are subject to manipulation through several different schemes such as booking fictitious assets, misrepresenting valuation of assets, or improperly capitalizing operating expenses. In particular, inappropriate capitalization of expenses into the PP&E account is a common way of reducing current period expenses.

 

Can somebody tell me what the fuck all this means? I don't have time to read all this shit.

 

It means Valeant is much more likely than the average firm to be the subject of SEC investigation for fraud.

Very Aggressive ‐ The lowest scoring 10% of corporations receive this ranking. The ranking indicates a very high incidence of accounting and governance practices that warrant further investigation.

http://www3.gmiratings.com/wp-content/uploads/2013/11/GMIRatings_AGR3.0Whitepaper_102013.pdf

 

I agree, it was very long winded....but very clear.
Translation...Valeant is fucked.

 

like fucked in the ass

 

well, they keep acquiring....more more more and stock keeps going up up up

 

They must be using Lube!

 

This is total BS. For example the CEO compensation part - 4 years ago the Wall Street journal applauded the executive compensation program expressing their wish that other,stock companies should emulate the pay for performance model. Mike has made a ton of money purely because he has lead the highest performing stock in terms of return in the NYSE for the last 6 years.

Yes the company has debt which is an obvious concern however given the favorable tax rate of which MP orchestrated with Biovail deal the organization will be able to get under the 4 x tax leverage ratio.

What is the source, some financial group that is shorting the stock? I have seen the DUNS scores for the organization and indicates that the company is stable.

 

Just a tad bit sensitive are we...are you questioning the integrity of the data?

 

What was the DUNS score for Enron before it blew up?

 

Keep on buying.

 

Keep on buying...suckers!!!
A fool and their money are easily parted. CHORTLE!!! hahahahaha!!

 

If it drops to $85 I'm still a millionaire.

 

Yeah well, you are still an asshole for supporting this company by investing in it...I assume you are simply throwing money at the stock broker on "advice". Doesn't make you clever, doesn't mean you've done jack shit.
All it means is that you've swindled money for your own self...this company is terrible to be employed at, terrible to be assosited with.
So for that, congratulations, YOU ARE A DOUCHEBAG.

 

This company is such a joke in the industry- the common response if you have Valeant on your resume is "I'm so sorry; I'm sure you're glad to be gone from that place." Do yourself a favor and run as fast as you can away from this hell hole.

 

The bonus is long gone ,it all smoke an mirrors here .