Has Bausch Health Run Out Of Catalysts?

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Bausch Health

Bausch Health (BHC) delivered Q2 2018 revenue of $2.1 billion and a net loss of $327 million. The earnings report was not much to write home about. Adjusting for the company’s recent name change, the stock is up about 20% Y/Y. BHC is very popular name among the “smart money.” It has gotten excellent public relations from Bill Miller and a bevy of hedge fund managers. In my opinion, big moneyed hedge fund managers are now in control of the stock.

This has helped the company nearly triple in value since its Q1 2017 low of just over $8 per share. Secondly, retail investors love to follow the smart money. As long as hedge fund managers remain involved with the name then BHC’s levitation could continue, regardless of its high debt levels or quarterly financial performance.

There has been a lot of activity since the company Q1 2017 low. Bausch Health has hived off non-core assets, pared debt and cut costs. It has also helped stabilize EBITDA margins in the process. However, its top line continues to falter. Total revenue of $2.1 billion was off 5% in Q2.

Revenue from Salix and Bausch & Lomb (considered core) was only up about 2% Y/Y. I do not see this improving, nor do I think it justifies any bullishness for the stock. According to Shocking The Street asset sales and public relations from Bill Miller and others could be priced in. Loss of exclusivity may not be though. Read more:

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