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Actionable news in VRX: VALEANT PHARMACEUTICALS INTERNATIONAL,

Some Hope, but No Cure, for Valeant

Valeant reported second-quarter sales of $2.4 billion and adjusted earnings of $1.40 a share. Both fell short of analyst expectations for the third consecutive quarter. Still, the stock rallied sharply after Valeant reaffirmed its full-year guidance for sales and adjusted profitability metrics and announced a new sale of one of its drugs to raise cash.

It is certainly true that avoiding another guidance cut is a positive for Valeant. Its shares are down by more than 90% since last August. Generally speaking, stocks that have been beaten down, with correspondingly low expectations, can often make the best opportunities for stock investors. With a debt-default scare in Valeant’s recent past, putting worries over its balance sheet in the rearview mirror could power the stock price higher.

But a closer look at the numbers suggests that backing up...


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