Realizing that there are a number of catalysts that 'could' boost the share price of PBH, we're concerned that it will take too long. It was purchased several years ago for a TFSA at an (ugh) average cost of $122. The last time I looked, it was trading at $80.23.
Even with the dividends received (thank goodness for dividends in this case), we are still down $17,300.
Here's the question: Even with all the positive catalysts going forward, do you think that the share price will increase enough to at least break even when accounting for dividends? Or do you think that we should swallow the loss and move to something else that has a more attractive valuation and greater upside?
As always, your comments and insights are very helpful.
In such cases we would first note that 'break even' should never be an investment goal. PBH has had its issues over the years: Covid, execution, and now tariffs. Still, its 10-year return is a reasonable 135%. The 4.11% dividend is attractive and secure. We think it has some potential, and the last quarter was solid. Debt would be our main concern. IF debt can be lowered, then we would expect valuation would improve. We would consider it a decent HOLD, but would not consider it high growth or really need-to-own for an investor with a growth focus. The last line in the question though is tricky: it is difficult to get great upside at low valuations. PBH is 16X earnings. Many quality growth companies will have a much higher P/E than that. We think CLS might be a good swap, for those inclined for more growth. At 23X earnings, it has done very well, and business looks secure for a couple of years at least. It would not be considered a buy-and-forget stock, whereas PBH might qualify on that due to its stable business and cash flow.