BHC, even with all the new interest and an exceptionally low valuation, is down 12% this year (up 21% in 52 weeks). Extremely high debt and weak execution have been the ongoing problems. Insiders own 1.5% but have been significant buyers this year. Paulson owns 19.1%. Blackstone explored a bid for BLCO last year but dropped out. Icahn had members on the board of BLCO but the agreement expired Aug 18 and they have resigned their positions. Debt is unchanged this year but cash rose $500M+ since December so net debt is marginally improved. But it is still $21B, more than 10X 12-month cash flow. Consensus does call for very good earnings growth in the next two years. Sales did beat expectations in the Q2. While Paulson's moves are interesting, and something might happen there (i.e. a bid, privatization, recapitalization) we are always wary of buying a stock 'just' on this possibility. Without the interest from funds, we would have zero interest here due to the high debt risk. We may see it as a HOLD with the possibility of a deal but we would not strongly recommend it as a BUY.
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