Premium Brands Holdings Corp (PBH.TO)

Great Management team. People want to sell their business to them. Maybe went ahead of themselves on a valuation multiple up to the beginning of the year and since then it has been nonstop down days. He feels there are more acquisitions ahead and won’t stay below $100 for long. (Analysts’ price target is $127.55)

He thinks this area has relatively low grassroots growth potential, but it continues to expand via acquisition – a potentially dangerous business strategy. He would like to see more of a dividend yield before he really got interested. Yield 1%.

Likes it and has owned it for a long time. They do beef jerky and other specialty foods. They buy smaller companies. Strong management. It will drift from time to time, like now. High valuation name. Be patient with this. Growth by
acquisition. They buyback shares and increase dividends. Good to own. Buy on this pullback.

He sees this company as a second or third tier player and would not buy this stock despite its recent large pullback. The major players like Kraft Heinz are suffering as large retailers are concentrating more on private brands. Margins are declining, revenues are flat, and so the industry as a whole is going through a valuation reset. In addition, with the consumer preference for healthier foods, small niche companies are forming in every city and are collectively taking away significant market share.

Despite a pullback, don't enter it now. At its peak, the stock got way past its fair market value. His target is $87. Don't look at it till then.

They started by consolidating the lunch meat business and expanded into the US. They have done well to rebalance the leverage. They have developed new channels like providing sandwiches to Starbucks. He would like to see the debt levels further reduced before jumping in.

Trim? Outlook for a year? Very well managed. The high valuation has been keeping her away. Have to wait for a stumble or correction. If anything gets above 5-6 %, it’s prudent to sell down to manage risk. The small brands they own have room to grow. As with any stock with a high valuation, could get hit if there’s a stumble.

When to sell? This stock is getting now occupies 20% of a viewer's portfolio. Sell at 10%. He doesn't like PBH'sir sandwiches, but yes, there's demand for them and their food. Management is fabulous. Valuation is too rich at 28x forward earnings for him to buy.

This chart has been a rocket. He does not own it as it always seems too expensive. If you own it, continue to hold, but don’t add at these price levels. He respects the management team.

High-quality company with fine management, but also a high multiple. Has benefitted from Starbucks relationship via food offering. 27x forward earning makes him uncomfortable. He'd buy it on a pullback.