Amsellem: Valeant Has No Floor

Valeant Pharmaceuticals Intl Inc VRX finished Tuesday down 51 percent. The stock is down even further since Probes Reporter first reported the company was facing an undisclosed SEC probe on February 29.

David Amsellem of Piper Jaffray recently told CNBC why he's Underweight Valeant. "We went to a Neutral on the stock from a Buy over four years ago and were telling people to take profits then," he explained. The reason for Tuesday's downgrade is: "You can't conclude there really is a floor."

Amsellem explained he doesn't see Valeant as a "true company...there's no core, there's just those series of disparate assets." He added that it looks like management doesn't have a handle on existing assets, stating that a breakup "frankly, would be in order."

In an intra-day note, the Piper analyst said a lack of a floor on Valeant has to do with its high debt levels and lack of visibility into organic growth. "[I]t is hard to argue that VRX shares are a bargain at a P/E of 5x the top end of the 2016 EPS guidance range," Amsellem wrote.

Valeant breached a five-year low on Tuesday.