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Why Valeant Pharmaceuticals Shares Jumped Today

By Erin Kennedy and Tim Hanson – Jan 7, 2014 at 7:00PM

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The Canadian drugmaker issued strong guidance for 2014 earnings and revenue, and investors sent shares soaring.

Valeant Pharmaceuticals (BHC 1.64%) impressed investors today by announcing strong guidance for 2014. The drugmaker expects earnings and revenue to come in about 40% higher than the previous year. Shares climbed as much as 10% in trading, hitting a new 52-week high.

Tim Hanson of Motley Fool Asset Management likes Valeant's lofty aspirations. He sees the company increasing cash flow by integrating its purchase of Bausch & Lomb, while revenue growth will likely come from new pharmaceutical products as well as another successful acquisition. 

However, Tim thinks the stock looks a little pricey at the moment. Furthermore, Valeant depends on acquisitions for growth, and though it boasts a good track record there, that's not always guaranteed.

Erin Kennedy and Tim Hanson have no position in any stocks mentioned. The Motley Fool recommends Valeant Pharmaceuticals. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Stocks Mentioned

Bausch Health Companies Stock Quote
Bausch Health Companies
BHC
$7.74 (1.64%) $0.12

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