Prestige Brands Holdings (PBH) Marked As A Dead Cat Bounce Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Prestige Brands Holdings ( PBH) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Prestige Brands Holdings as such a stock due to the following factors:

  • PBH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.8 million.
  • PBH has traded 68,456 shares today.
  • PBH is up 3.3% today.
  • PBH was down 9.1% yesterday.

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More details on PBH:

Prestige Brands Holdings, Inc., through its subsidiaries, engages in the marketing, sale, and distribution of over-the-counter healthcare and household cleaning products in North America and internationally. It operates through two segments, Over-The-Counter Healthcare and Household Cleaning. PBH has a PE ratio of 17.7. Currently there are 2 analysts that rate Prestige Brands Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Prestige Brands Holdings has been 338,800 shares per day over the past 30 days. Prestige has a market cap of $1.5 billion and is part of the services sector and wholesale industry. The stock has a beta of 2.08 and a short float of 1.9% with 1.55 days to cover. Shares are down 26.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Prestige Brands Holdings as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, attractive valuation levels, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • PBH's revenue growth has slightly outpaced the industry average of 1.0%. Since the same quarter one year prior, revenues slightly increased by 4.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 65.78% and other important driving factors, this stock has surged by 43.20% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, PBH should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • PRESTIGE BRANDS HOLDINGS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PRESTIGE BRANDS HOLDINGS increased its bottom line by earning $1.28 versus $0.74 in the prior year. This year, the market expects an improvement in earnings ($1.67 versus $1.28).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 70.4% when compared to the same quarter one year prior, rising from $19.24 million to $32.79 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Pharmaceuticals industry and the overall market, PRESTIGE BRANDS HOLDINGS's return on equity exceeds that of both the industry average and the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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