Tell me where I’m going to die, that is, so I don’t go there.
– Charlie Munger
I’m planning to make this a series*. I hope looking at the “graveyard of capital” will make my actions more cautious. This should makes me a better Investor, as we know, rule no. 1 is not to loose money.
It’s always easier in hindsight but would you invest in this company based on this report?
*Btw. other companies I later want to look at are: Enron, Banca Monte dei Paschi di Siena, Saipem, Lehman Brothers …
But let’s begin with this: Valeant in Feb 2015
Valeant 2014 Annual Report (link)
Report Date: February 25, 2015
Price then 190 US-$
- 5 pages “Advertisement” in the front of the Report
- extreme outperformance of the stock
- no dividends paid since 2010
- super strong revenue growtt
- good OI in 2014
- more shares outstanding (not dramatically)
- 0,3 bn Cash vs 0,9 bn Interest expense (page 48) !
- Total debt 15.2 bn (page 52) (~twice revenue, 7,5x operating income)
- issuing high yield bonds 6,5%, 7,5% (page F-51)