Pacific Brands Limited [ASX: PBG] is a consumer products company with three main businesses — underwear, Sheridan Tontine, and Brand Collective. The company has household name brands like Bonds, Sheridan, Tontine, Clarks, and Volley under its banner.
Pacific Brands work wear business has been sold to Wesfarmers [ASX:WES], though both parties are still waiting on regulatory approval before this is finalised.
The share price closed higher 2.11% on Thursday.
Since 2014 full year financial results were released a week ago, the stock has lost 6.73%.
Net profit after tax (NPAT) was down 28.2% to $53 million and earnings before tax and interest were down 25.3% to $91.2 million. Overall, the company had a net loss of $224.5 million.
The only good news was that sales increased 3.8% to $1.32 billion.
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It’s been a rough year for shareholders of Pacific Brands. Year to date, the stock is down 24.22%.
The stock traded as low as 45.5 cents yesterday. However, it eked out a small rally today. The last time the share price was this low was mid-2012.
Today’s rise suggests the market thinks the share price has hit its low point for now. But be warned: Just because it’s cheap doesn’t make it a good buy. Wait this one out until Pacific Brands management shows some clear direction.
Shae Smith+
Editor, Money Weekend
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