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URL:  https://boards.fool.com/i-do-not-relative-valuation-is-of-much-use-here-32164502.aspx

Subject:  Re: VRX - Some notes from recent news Date:  3/17/2016  10:10 PM
Author:  itconsultant Number:  24030 of 26247

I do not relative valuation is of much use here. Not any company in the pharma space has that kind of debt. And for the heck of it,

GILD is at 5.6x EBITDA. and 7-8x FCF. here are some simple numbers on GILD
There is NON - GAAP BULL bull $$$$

Market Cap $120B
$4B net cash
FCF $20B


That is 6x FCF. Forget 10x Debt to FCF. This Is 6x P/FCF.

But just because it is so cheap, does not make it a buy. There are fears about peak revenues for its HEP C drug and competition. None of that is even in the numbers yet...

And check its history in terms of numbers, drugs discovery , approval etc. HIV leader and Hep C and then a backlog too.

So why would you buy any thing with that kind of debt and non- trusted revenues etc etc...

When you can buy a Pure GAAP / FCF machine for 6-7x FCF. (trailing)..

I think people love catching falling knives. and the fact that it fell from $250 makes people think the upside is multi fold. No one thinks hey maybe that $200+ level was just baloney.... that only happens later...

Like CSCO at $500B market Cap...
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