Here are some abstracts from the Eureka Report published recently.
"David Paradice, one of Australia's best-known small-cap experts, manages about $860 million in companies outside the ASX 100. His expertise is in selecting some of the most beaten up, downtrodden and downright ugly stocks to add to his portfolio."
"Today he lists Platinum Asset Management, Mount Gibson Iron and Pacific Brands as his small-cap standouts and explains why he believes they have been priced incorrectly."
"he remains a 'true believer' in discounted cash flow as does Warren Buffett."
"Pacific Brands was one of those companies where we kind of felt that it had to raise money and we thought it was a good opportunity to buy that stock. Again, you've had huge P/E contractions and you've had big earnings contractions and you've got big debt numbers. The reduced earnings forecasts contribute to this meltdown in the share price, which creates a downdraft that stocks like Pacific Brands get caught up in.
They raised $253 million and we had an existing position and then we topped up again. The stock itself is worth over $1 (it's trading at about 88c at the moment) and it's a stock which, although not fantastic quality, is just too cheap. Fair value could be $1.20 to $1.50. It's another good example of the P/E contraction where you go from paying four times in a bear market to paying 10 times in a bull market. That's a 150% increase in the price."
Caveat Emptor - do your own research as to your own position about the suitability of this stock for your trade.Information from third party have not been vouched and the reliability cannot be quarantee.Matters raised is of a general matter and for discussion only.
PBG Price at posting:
$1.07 Sentiment: Hold Disclosure: Held
