For long-term investors, finding companies with a long track record of creating shareholder value, that also have a decent prospectus for future growth, is hard to do.
In Canada, many traditional segments of the markets investors had put their money into in recent decades (think oil and gas) have shifted from a positive sentiment around growth to an overly pessimistic viewpoint.
Such is the case, I think, for food company Premium Brands Holdings (TSX:PBH), a company operating in what many investors might consider an "outdated" industry.
Premium Brands is a very large Canadian owner of a range of good brands found in most national retail chains. The company also has a strong presence in the prepared foods market segment, a business which should probably get more recognition from the financial markets.
This is because the company has a number of large clients, such as Starbucks (NASDAQ:SBUX), for whom Premium Brands produces many of its sandwiches. These are high volume businesses which produce very decent margins, all things considered, making Premium Brands really worth a premium in this sector.
From a valuation perspective, Premium Brands’ stock price has come off slightly of late, providing investors who have been considering making an investment in this company with a potential buying opportunity.
This company has the potential to see a re-acceleration of earnings, making Premium Brands an interesting option to consider. I’ll remain on the sidelines for now, but value investors may want to consider Premium Brands on any dips that may materialize moving forward.
Invest wisely, my friends.
