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Hi Bill - I wanted to ask your opinion on Biovail. Much-maligned and under regulatory clouds both in the US and Canada, I'm sure you have heard the rumbling about Mr. Melnyk looking to take it private. This could have positive implications for the stock. It looks relatively cheap, too, but there is a lot of noise around this stock, and it's hard for us to read Melnyk. The management said there are no allegations (yet) of anything illegal or improper. Any thoughts ? Thanks again and keep up the excellent work. /Patrick"

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Patrick, is Biovail the top player in the pharmaceutical industry, or any sub-industry (Biotech, Diagnostic Substances, Drug-related Products or Manufacturing- Big Pharma, Little Pharma, or Generic)? The answer clearly is a resounding NO.

Why is that Patrick? Well, if you look at the revenue and earnings growth metrics, you'll see an under-performer. While price-to-earnings and return on equity are reasonable (but not exciting), the price to free cash flow is too high, and, relative to its peer group, its net profit margin too low.

In fact, margins have been falling since 2002, and maybe that's why Melnyk would care to go private. He's in a tough business, and as a private operator, outside the glare of public scrutiny, maybe he could operate more successfully, i.e., as a guerrilla fighter against a pretty impressive number of armies (see below).

Of the 11 Wall Street analysts who follow BVF, the average opinion rating is 3.1 on a range of 1 (best) to 5, which is moderately negative. And that sums up my feeling as well: not too hot; not too cold. Meaning: I'm not interested.

The Biovail headquarters is located not far from where I live in West Toronto on the Mississauga border. I have friends who know the founder and promoter, Eugene Melnyk. I hear good things, but the man is into horse racing in a big way, and owns the Ottawa Senators hockey team and a Toronto major junior hockey team, as well as lives much of the time in Barbados.

I'd prefer to see a CEO who is bolted to his office chair, and maybe that explains the reputational hits suffered by this company in recent years, as Melnyk was expanding his personal horizons.

So, Patrick, at the end of the day, I can't say that BVF makes it into the big leagues with the likes of (alpha order): AET, AMGN, BMET, BMY, GSK, JNJ, PFE or UNH, which in my opinion are better managed, more successful companies in that space. Therefore BVF doesn't hit my radar screen, and I'm more likely to see the Biovail/Melnyk names on the newspaper's front page, or sports page, rather than the business section.

As I see it, Melnyk is a player. His wealth is tied up in his stock. It is quite possible that he is tiring of the daily rat race in the pharma game, and he may well sell out to private equity interests. I wouldn't know. But for traders to buy and sell stock on that kind of speculation is a mugs game because what you read and hear, without being in the room yourself, is likely to be 98 pct spin. That's not a percentage figure that works for me.

So BVF stays off my radar.

But, if I were to trade it on the basis of technical indicators (I don't), I'd start with RSI, as follows:

And, I'd spend more time looking over the financial data, as follows: ADVFN financial data for BVF.