For his second "Executive Decision" segment of Tuesday's Mad Money program, Jim Cramer spoke with Joe Papa, chairman and CEO of Bausch Health (BHC) , the healthcare company.
Next year, Bausch will be splitting into three companies, one for eye health, one for pharmaceuticals and a third for medical aesthetics, in an attempt to unlock value.
Papa said over the past five years he's been able to reduce the debt at Bausch by $10 billion, resolve their legacy legal issues and return the company to organic growth. Splitting the company into three great companies is the next chapter for Bausch.
Bausch will begin the split within the next 30 to 60 days, Papa said, market conditions permitting.
Let's check out the charts.
In the daily bar chart of BHC, below, we can see that the shares made a high back in March and then worked progressively lower. BHC is trading below the declining 50-day simple moving average line as well as the bearish 200-day line.
The On-Balance-Volume (OBV) line shows a long but slight decline from March suggesting that sellers of BHC have been more aggressive for several months. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line but gives a weakish cover shorts buy signal.
In the weekly Japanese candlestick chart of BHC, below, we can see a bearish-looking picture. Prices are in a decline and trade below the declining 40-week moving average line.
The weekly OBV line and the MACD oscillator are bearish. A long lower shadow would be nice but it is not showing.
In this daily Point and Figure chart of BHC, below, we can see a potential downside price target in the $18 area.
Bottom-line strategy: The CEO believes that splitting up the company will unlock value, but unfortunately traders and investors do not agree at this point in time. Continue to avoid the long side.
