Bausch Health Companies Inc. (BHC): Is This Insider Trading a Scary Sign?

After opening Friday at around $24.31, Bausch Health Companies Inc. (NYSE:BHC) stock surged to as high as $24.69. It then made a downturn, dipping as low as $24.04. Although the stock bounced a bit into the close, it finished the day at $24.48, down -0.13 points or -0.53 percent on the day. The final volume for the day was 2.932 million, which was less than its average volume. The firm is left with a market cap of $8.6 billion and now has 351.44 million shares outstanding. Bausch Health Companies Inc. (BHC) stock has gained 4.93 percent of market value in 21 trading days.

BHC stock has a trailing 3-year beta of 0.59, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$12.14 a share in the trailing twelve months. The stock’s value has surged 32.54 percent year to date (YTD) against a rise of 37.76 percent in 12 month’s time. The company’s shares still trade -13.95 percent away from its 1-year high of $28.45 and 69.53 percent up from 52-week low of $14.44. The average consensus rating on the company is 2.7, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Bausch Health Companies Inc. (BHC) will probably climb 23.73 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $58 price as 12-month high target. This represents a whopping 136.93 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $29.5, which represents a return potential of 20.51 percent when compared to the closing price of the stock of $24.48 on Friday, February 08. The lowest price target for the stock is $9 — slightly more than -63.24 percent from BHC’s current share price.

History has shown that shares in Bausch Health Companies Inc. have gone up on 3 different earnings reaction days and are predicted to add 0.07 percent when the company reports upcoming earnings. Investors will get their next glimpse of BHC’s Q4 earnings on February 20. Analysts are forecasting revenue to suffer decline of -3.7 percent to $2.08B in the fiscal fourth quarter, while earnings are seen soaring by nearly -14.29 percent to $0.84 per share. It earned $1.13 per share, better than the $0.84, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $2.14B, better than the $2.09B analysts expected. Earnings are estimated to increase by 158.6 percent this year, 0.13 percent next year and continue to increase by 7.05 percent annually for the next 5 years.

Let’s take a look at some insider activity at Bausch Health Companies Inc. (NYSE:BHC) and see the pattern. The earliest insider trade took place on 12/14/2018. Appio Thomas gathered a total of 25.44 thousand shares of company at average share price of $22.96. The total for the purchase was set at $584.1 thousand. After this transaction, the Pres&Co-Head Bausch&Lomb/Int’l account balance stood at 154.36 thousand shares. The stock grew 6.62 percent since that insider purchase. On 10/16/2018, Ackermann Christina, EVP AND GENERAL COUNSEL, sold 19.95 thousand shares at a price per share of $24.98. This removed 498.25 thousand shares from the insider’s fortune and the stock saw a -2 percent retreat in value since the news became public. This transaction left 51.46 thousand shares in the EVP AND GENERAL COUNSEL account.

On 09/14/2018, CHAIRMAN & CEO Papa Joseph C performed a purchase transaction worth $669.6 thousand. This purchase at $22.32 each has added 30 thousand shares into the insider’s portfolio position. Meanwhile, shares have recorded 9.68 percent increase since the transaction was reported. The insider now is left with 687.08 thousand shares remaining in the account. Herendeen Paul, who performs the EVP and CFO job, bought 10 thousand shares for $226.1 thousand. The acquisition occurred on 09/14/2018 was priced at $22.61 per share. The share price soared 8.27 percent since the reporting date. Herendeen Paul now left with a stake of 226.87 thousand BHC stock worth $5.55 million after the insider buying.

The stock is currently hovering around the first support level of $24.12. Below this, the next support is placed in the zone of $23.75. Till the time, the BHC stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 56.67 on daily chart, which may remain a cause for concern. If the price breaks below $23.75 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $24.77 mark may result into a pull-back move towards $25.05 level.

Further, it is sporting a 1.02 on the Price-to-Sales ratio. Compare this with the industry average P/S of 7.55. 71.6 percent is the gross profit margin for Bausch Health Companies Inc. and operating margin sits at -34 percent. Along with this, the net profit margin is -39.1 percent.