Why Endo Health Solutions Shares Vaulted Higher

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of health solutions provider Endo Health Solutions (NASDAQ: ENDP  ) vaulted higher by as much as 17% late in the day, on reports that it may put itself up for sale.

So what: The story broke shortly after 2:30pm ET that, according to a Reuters report, Endo is in talks with interested parties to sell the company. Those parties, based on that report, include Valeant Pharmaceuticals (NYSE: VRX  ) and Warner Chilcott (UNKNOWN: WCRX.DL  ) . Reuters also notes that Valeant declined to comment when asked, while both Endo and Warner Chilcott representatives couldn't be reached for comment.

Now what: As usual, I strongly discourage anyone from chasing companies involved in buyout rumors because, just as often as these rumors start, they can die. From a fundamental perspective, I noted my approval of Endo three weeks ago, which has a well-diversified and highly-profitable portfolio of branded and generic drugs, as well as medical devices and technologies. Based on its current single-digit forward P/E ratio, I believe it more than takes into account the ongoing probe by the U.S. government into its numbing agent, Lidoderm. Still, I'd really shy away from taking a position here with rumors of a buyout swirling.

Craving more input? Start by adding Endo Health Solutions to your free and personalized Watchlist so you can keep up on the latest news with the company.

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Related Tickers

9/23/2016 4:00 PM
ENDP $23.39 Up +3.13 +15.45%
Endo International CAPS Rating: ****
VRX $27.72 Up +0.87 +3.24%
Valeant Pharmaceut… CAPS Rating: ***
WCRX.DL $0.00 Down +0.00 +0.00%
Warner Chilcott CAPS Rating: *****