I think there are much better targets for short selling than PBG. Even assuming a fall in underlying revenue and accounting for the capital raising PBG is still trading around fair value at present.
My calcs have 923M shares on issue now. 2008 FY profit was 117M so with a 20% fall in profit you'd still get underlying profits (excluding intangible impairments which have no impact on future profitability) of around $100M equating to more than 10c a share. This is before you consider reduced interest costs and future cost reductions down the track from the offshoring of manufacturing.
I think the 'dead brands' comment is over the top. I'm a big fan of monitoring my shares on the ground and have not noticed any drop off in shelf space for PBG products in Myer or Big W. In the basic clothing sections (undies/socks), PBG products are easily the most numerous. Maybe you're referring to some of the 2nd tier brands as being 'dead'?
Debt/Equity is about 40%, so no dramas there.
PBG Price at posting:
$1.01 Sentiment: Hold Disclosure: Held
