Valeant Pharmaceuticals Intl Inc (VRX) Pops on CEO Stock Purchase

Drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is 1.5% higher at $24.51 this morning, after CEO Joseph Papa purchased 202,000 shares at an average price of $24.48, according to a recent Securities and Exchange Commission (SEC) filing. Still, the battered stock is off 89% year-over-year, and has been pressured lower by its 40-day moving average since January. In fact, a recent rejection at this trendline sent VRX spiraling to a new five-year low.

Today's upward price action should make recent options bulls happy. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), VRX's 50-day call/put volume ratio of 1.92 shows long calls nearly doubling puts. Moreover, this ratio ranks higher than 96% of all readings taken in the past year.

Likewise, VRX has a Schaeffer's put/call open interest ratio (SOIR) of 0.88 -- just 3 percentage points from an annual low. That means that, among options expiring in three months or less, traders have rarely been more call-skewed.

Outside of the options pits, however, plenty of bearish sentiment remains. Short interest on VRX rose by more than 44% during the most recent two-week reporting period, representing 7.6% of the equity's available float. And of the 16 analysts following VRX, 11 still rate it a "hold" or "strong sell." Should short sellers begin to cover their positions, or brokerages raise their outlooks, Valeant Pharmaceuticals Intl Inc (NYSE:VRX) could get an even bigger leg up. Looking ahead, the company will put on its annual shareholders meeting tomorrow morning.