NEW BULLISH Plays
Prestige Brands Holdings - PBH - close: 41.84 change: +0.98
Stop Loss: 39.95
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Entry on March -- at $---.--
Listed on March 19, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 342 thousand
New Positions: Yes, see below
Why We Like It:
Shares of PBH are outperforming the broader market. The relative strength has lifted the stock to new all-time highs and a +20% gain in 2015.
PBH is part of the services sector. According to the company, PBH "markets and distributes brand name over-the-counter and household cleaning products throughout the U.S. and Canada, and in certain international markets. Core brands include MonistatÂ® women's health products, NixÂ® lice treatment, ChlorasepticÂ® sore throat treatments, Clear EyesÂ® eye care products, Compound WÂ® wart treatments, The Doctor'sÂ® NightGuardÂ® dental protector, the Little RemediesÂ® and PediaCareÂ® lines of pediatric over-the-counter products, EfferdentÂ® denture care products, Luden'sÂ® throat drops, DramamineÂ® motion sickness treatment, BCÂ® and Goody'sÂ® pain relievers, BeanoÂ® gas prevention, DebroxÂ® earwax remover, and GavisconÂ® antacid in Canada."
The company's most recent earnings report was noteworthy. Analysts were expecting a profit f $0.40 a share on revenues of $190.2 million. PBH delivered $0.48 a share, which is a +60% improvement from a year ago. Revenues were up +36.4% to $197.6 million, another beat. PBH's OTC products saw +37.2% sales growth in North America and +107.8% growth internationally.
Matthew M. Mannelly, President and CEO of PBH commented on his company's performance, "In light of our excellent year to date and third quarter results, we are updating our previously provided outlook for fiscal year 2015. We are tightening our expected adjusted EPS range from $1.75 to $1.85 per share to $1.82 to $1.85 per share, and anticipate revenue growth at the high end of our previously provided outlook of 15-18%. The update is driven by anticipated organic growth in the legacy business during the fourth quarter."
Wall Street analysts are forecasting 2015 Q1 (PBH's Q4) results to see +29% EPS growth and +30% revenue growth.
It's also worth noting that PBH is a potential buyout target. They have been targeted before. Back in 2012 Genomma Lab offered $834 million in cash but PBH rejected the offer, calling it too low.
The better than expected earnings in early February launched PBH above major resistance in the $37.00 area. Shares spent four weeks digesting those gains and now they're back in rally mode. The point & figure chart is bullish and forecasting at $54.00 target. Tonight we are suggesting a trigger to launch bullish positions at $42.35.
Trigger @ $42.35
- Suggested Positions -
Buy PBH stock @ (trigger)
- (or for more adventurous traders, try this option) -
Buy the JUL $45 CALL (PBH150717C45) current ask $1.70
option price is a current quote and not a suggested entry price.
Option Format: symbol-year-month-day-call-strike