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(March 31, 2011) and most recent (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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