The incredible growth story of Valeant Pharmaceuticals Intl Inc. (TSX:VRX)(NYSE:VRX) does not appear to be ending anytime soon. Investors and analysts alike were impressed by the myriad of deals the company did to acquire other companies over the past years, each acquisition more impressive than the previous one, sending the stock higher.
Given the current economy as well as the pace at which Valeant has grown, it begs the question of how long can this growth continue, and does this still make Valeant a good option for your portfolio?
To answer the question, let’s first start by examining how the company is doing.
How is the company doing?
Valeant is currently trading at $301.25. Yes, this is an expensive stock to own, but with good reason. While the overall market has lost its steam and has dropped some 7%, Valeant continues moving upward, and is up nearly 5% in the past three months.
Outside of the current quarter of economic slowness, the company is up an impressive 85% year-to-date. Extend this out to an entire year, and the company is up 142%. Long-term investors will take note of the best-kept secret about Valeant—the five-year number is an awe-inspiring 1,166%
This incredible growth has seen Valeant pass the Royal Bank of Canada to become the most valuable company in Canada. What’s more impressive is that Valeant continues to grow with no sign of slowing down.
Valeant isn’t done expanding yet
Valeant is renowned for the ability to acquire and integrate other companies into its existing and ever-growing distribution network. Here are two of the more recent acquisitions—and in case you are wondering, there have been seven so far in 2015 alone:
Synergetics is an ophthalmic surgical device manufacturer. The company was purchased at a 48% premium over the company’s closing price in a deal that is reported to be worth $166 million.
The deal is expected to be completed during the fourth quarter of the year, and is expected to boost the expanding portfolio of eye products that Valeant offers.
Sprout Pharmaceuticals is the company responsible for manufacturing the drug Addyi— otherwise known as the female Viagra. The FDA approved the drug for sale only a few weeks ago, and Valeant appeared within two days and snatched up the company for a reported $1 billion.
Valeant CEO Mike Pearson noted that the drug could earn revenue in the hundreds of millions, if not billions for the company. The drug is slated to begin sale in October.
The significance of this deal is off the charts. It represents the company’s first foray into women’s health, and the ludicrous potential this deal brings in terms of revenue for years to come.
In my opinion, Valeant continues to be a great option for the investor seeking growth.
