Is Bausch Health Companies a Good Stock to Buy Now?
Bausch Health Companies (NYSE: BHC) has been one of the past year's top-performing pharma stocks. In the last 12 months, the firm returned 86%, hands down beating the S&P 500's 40% total return over the same period. A large portion of the stock's gains came in February, when billionaire investor Carl Icahn decided to invest 27.8 million shares in Bausch Health-- a 7.83% stake.
It is important to note, however, that Bausch Health is heavily leveraged. The firm's net financial debt is more than 7 times its operating income less non-cash expenses (EBITDA). When a company's financial leverage ratio is greater than 5, that usually indicates it's at serious risk of default. Just what could be so enticing about Bausch Health that led Icahn to purchase a massive stake in it?
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Source Fool.com
