It has been a miserable week on the street with indexes heading for their worst week since November. Although it is hard to find positives for the overall market, some individual issues have receive recent good news and are bucking the overall trend of the market. One such stock is Prestige Brands (PBH) which sells basic products that should hold up well in a slow growth environment such as Luden's cough drops and Efferdent denture products.
Key announcements and catalysts for PBH:
It beat earnings estimates this week with adjusted earnings after items of 26 cents a share versus expectations of 23 cents.
Mexican pharmaceutical products company Genomma Lab had offered to buy Prestige Brands for $834 million in cash, a premium to current value, but the company rejected the offer.
Oppenheimer just upgraded the stock and put a $17 price target on the stock.
Janney Montgomery Scott upgraded the stock to "Buy" this week as well and has a $19 price target on the stock.
Prestige Brands - "Prestige Brands Holdings, Inc., together with its subsidiaries, engages in marketing, selling and distributing over-the-counter healthcare and household cleaning products primarily in North America."(Business description from Yahoo Finance)
4 reasons PBH is undervalued at just over $13 a share:
- Consensus earnings estimates have steadily increased over the past three months for both FY2012 and FY2013.
- Insiders have been net buyers of the stock over the previous nine months.
- PBH trades for less than ten times forward earnings, has a five year projected PEG of slightly over 1 (1.07) and sells for about 9.5 times operating cash flow.
- The median analysts' price target of on PBH is $19.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.