Over the past five years, Valeant Pharmacuetical (NYSE:VRX) stock is up 856%, absolutely smashing the returns delivered by the market. And the company has recently made waves by teaming up with activist investor Bill Ackman of Pershing Square to take over Allergan, the specialty pharma company famous for Botox. 

In the following video, Motley Fool analysts Michael Douglass and Brendan Mathews discuss Valeant's three key strengths: efficiency, smart acquisitions, and a differentiated strategy. As Brendan explains, Valeant CEO Mike Pearson comes from outside of the pharmaceutical industry, and since joining Valeant, he has cut costs and purchased more than 50 companies, transforming Valeant into a highly diversified specialty pharmaceutical company with strong positions in dermatology and ophthalmology.

Brendan Mathews owns shares of Valeant Pharmaceuticals. Michael Douglass has no position in any stocks mentioned. The Motley Fool owns and recommends shares of Valeant Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. 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.