This is an introduction to my Prestige Brands stock analysis which is based on Q3 2018 results and projections for the remainder of FY2018.
- Prestige Brands is a small cap company engaged in the business of marketing, sales, manufacturing and distribution of well-recognized, brand name, over-the-counter (“OTC”) healthcare and household cleaning products.
- It crossed my radar in December 2011 when it acquired 17 over-the-counter medicine brands sold in North America from GlaxoSmithKline Plc for $660 million cash.
- I have regretted not investing in PBH given its appreciation in value since such time but the excessive leverage and pull back in stock price in recent months reaffirms that I made the right decision.
- PBH does not suit my reasonably conservative investor profile and I will not be taking a position despite the pullback in stock price over recent months.
Prestige Brands Holdings, Inc. (NYSE: PBH) first raised my interest in December 2011 when it was announced that it had agreed to buy 17 over-the-counter medicine brands sold in North America from GlaxoSmithKline Plc for $660 million cash.
At the time I reviewed PBH’s most recent year-end financial statements (March 31, 2011) and most recent quarterly financial statements (September 30, 2011) and deemed PBH would be too highly leveraged and would not be suitable for my investor profile.
I will admit it has been extremely frustrating to watch PBH’s stock price appreciate from ~$12 in December 2011 to ~$56.75 in April 2016. I gained a bit of satisfaction when the stock price pulled back to ~$45 in October 2016 but then the stock ratcheted up to ~$57.40 in April 2017.
Despite the temptation to dip into PBH as a result of the meteoric rise in stock price from the time PBH first crossed my path, I never pulled the trigger.
I now see that PBH has retraced from the ~$57.40 level in April 2017 to ~$31.37 as I compose this post. This has prompted my curiosity and hence this article.
While a company this size is small relative to the companies in which I invest, I know there are readers who are interested in investing in smaller market cap companies. As a result, I am entirely open to periodically analyzing companies below my market cap threshold.
Please click here to read my Prestige Brands stock analysis.
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