What happened

Shares of Bausch Health Companies (BHC -0.81%) are down by 13.2% as of 11:24 a.m. EDT Thursday morning. The multinational healthcare company is tanking today in response to the marketwide sell-off that's being fueled by COVID-19.

Yesterday, President Trump suspended flights between the U.S. and Europe for 30 days, and the NBA decided to pause its season for the moment as a result of the public health threat posed by COVID-19. These two events are spooking investors across the globe today. 

An elderly man undergoing an eye exam.

Image source: Getty Images.

So what

What's remarkable is that COVID-19 shouldn't have any material impact on Bausch's underlying business. The company makes the bulk of its money with eye care products and specialty pharmaceuticals like the irritable bowel syndrome medication Xifaxan. People aren't going to stop taking care of their eyes or treating their chronic illnesses because of a virus. What's more, Bausch's shares were already dirt cheap prior to today's sell-off. The company's shares are now trading at distressed asset levels based on its forward-looking price-to-sales ratio of just 0.62. 

Now what

Should bargain hunters pounce on this healthcare stock today? The answer is a resounding yes. While Bausch still has a long way to go to improve its balance sheet, the company should ultimately be able to complete this comeback within the next three to four years. Therefore there's no reason its shares should be trading at levels that would seem to suggest a bankruptcy filing is imminent. Bausch, after all, is on solid ground, and its future looks bright.