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Actionable news in VRX: VALEANT PHARMACEUTICALS INTERNATIONAL,

7 Red Flags of an Imminent Company Meltdown

4. Monster Debt

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks with serious upside potential in the next 12-months. Learn more.

Some indebted companies manage to beat the odds and clean up their balance sheets, but more often than not, poor debt metrics spell doom. A stark case in point is shale producer Chesapeake Energy (CHK) , which is currently saddled with debt of $9.65 billion for a whopping total debt-to-equity ratio of 4,213, compared with 25.7 for its industry. Small wonder that Chesapeake is a dangerous stock on the verge of collapse.


5. Murky Financial Statements

We again turn to embattled Valeant. In April, after months of foot-dragging and an embarrassing Senate hearing, Valeant finally filed its annual 10-K report with the Securities and Exchange Commission.

In its report, the company unveiled risk factors related to its accounting practices and new sales arrangements, as well as previously undisclosed state regulatory...


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