NEW YORK (TheStreet) -- Valeant Pharmaceuticals (VRX) stock is rising by 3.50% to $65.40 in late-morning trading on Wednesday, after the drug maker added three new independent directors to its board.

One such director is Stephen Fraidin, the vice chairman of Pershing Square Capital Management. The $12 billion hedge fund owns 16.5 million shares and is one of the company's biggest investors, according to Reuters.

"I've known Steve Fraidin for 30 years," TheStreet's Jim Cramer says in the above video. "He's an absolutely terrific M&A lawyer. It's a signal that things could get better at Valeant."

Valeant also added Fred Eshelman, former CEO of Pharmaceutical Product Development, and Thomas Ross, who served as president of the University of North Carolina.

Anders Lonner has stepped down as director.

The new directors join the board as Valeant has had to restate its earnings and acknowledge that it is being investigated by the SEC.

The company's new board members, though encouraging, don't excuse it from Cramer's rule that accounting irregularities equal sell, Cramer notes.

Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.

Valeant's strengths such as its robust revenue growth, good cash flow from operations and expanding profit margins are countered by weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and generally higher debt management risk.

You can view the full analysis from the report here: VRX

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.

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