PFD - Lateral Breakout?

Premier Foods (19th January 2015)

The chart of Premier Foods has been on my radar screen since the Christmas period, as the price gently slid (laterally) out through the gently sloping downtrend line that has been in place since last September. This line itself marked a more shallow downtrend than the longer running line, in place since April 2014 (see graph below)...

I'm interested in the 50 day moving avergae (blue line), which has just started to turn up and the fact that the downtrend on the OBV has also been broken (to the upside). Supporting this are buy signals on both ADX indicators (annotated on the graph).

Key Metrics

The key points, from the Key metrics (above) are:

• Low PSR (0.18)
• Low PE(pr) of 4.7
• Low PCF & P/FCF (1.559 & 1.646 [respectively])

However, don't forget to check out the share dilution as a result of the placing and rights issue (completed in April 2014).

RNS (Management Statement)

The following RNS states that Q4 Management Statement will be released on Friday 23rd January 2015. I also note that there is a link to a webinar... I might just listen in!

16 January 2015

Notification of Management Statement

Premier Foods' Quarter 4 Management Statement for the quarter to 31 December 2014 and summary results for the 12 months to 31 December 2014 will be released at 7.00am on Friday, 23 January 2015.  This will be followed by a webinar for investors and analysts at 9:00am, hosted by Gavin Darby, CEO and Alastair Murray, CFO. The details are outlined below.

Webinar registration link:

www.premierfoods.co.uk/investor-relations/

Summary

Notwithstanding the mixed signals, it may be worth keeping a close watch on PFD in the next few months. What do you think?

Mick (19th January 2015)

Is the PFD Dough Rising?

Premier Foods (9th December 2013) - Possible Reversal Underway?

Premier Foods (PFD) rose 7p (6.3%) today and in doing so looks as if it may have found support at the 200 day moving average over the past three trading days. Have a look at the graph (below) and see what you think...

As you can see, the RSI is in oversold territory and the OBV remains strong. those of us following PFD could be in for an interesting few weeks. What do you think?

Mick (9th December 2013)

The Answer Looks Like... "YES"

The Question Was "Premier Foods - Any Icing Left?"

In a recent Inner Circle Post (11th July 2013), I asked the above question about Premier Foods. At the time, the PFD share price (SP) was 66.75p. Although the SP has since nudged gently upwards, this mornings Interim Results from Premier Foods should see a re-rating that could be good news for us DIY-Investors who took the plunge.

PFD have helpfully produced a factsheet, which you will find HERE.

The key message coming out of these results is that "FY 2013 Trading Profit expected to be around top end of market expectations", coupled with thefact that "underlying business Trading Profit up 50.2% to £47.4m".

Technical Analysis

The chart, at close of play yesterday, looked like this...

I have annotated what I consider to be the key points (on the graph above) but from the early price action this morning, it seems apparent that the market likes the results.

What do you think of the prospects for PFD over the next 12 months?

Can Premier Foods get back to the First Division?

Premier Foods (LSE: PFD) - SP= 85.75p, MCAP=£205.6m (at close 24/10/2012)

Premier Foods looks as though it is shaping up to be a classic recovery stock. At the beginning of October, I added it to one of the DIY-Investors Active Portfolios (replacing Shaftsinkers) and so far that looks to have been a good move. So in amongst my current plans to "Escape to the Country", what attracted me to it?

Well, you won't be surprised to hear that it was a combination of technical and fundamental indicators. I've summarised these below...

Technical Indicators

Back at the beginning of October, the PFD share price had nudged through the 50 day moving average, following a lateral breakout from the downtrend (marked by the orange line) that had been in place since the middle of June. On Friday 5th October, I bought PFD for the active DIY-Investors portfolio at 66.5p (having sold ShaftSinkers the day before). At the time, the SP graph looked like this...

You can see that, as is common, there was no increased volume to support the lateral breakout (17th September onwards) although the OBV broke up through the downtrend and the RSI was starting to show increasing strength. The clear breakthrough of the 50 day m.a. was the factor that tipped the balance for me, coupled with the general shape of the Share price graph over the medium term (see below):

Note that the low at the beginning of September 2012 was a higher low, compared to the lows of October/November 2011 (marked by the high volume).

Fundamental Analysis

Let's have a look at the Key Metrics (from Sharescope):

Background

 PFD has been burdened by the large debts (£1.2 Bn) taken on when it acquired Hovis and Mr Kipling group (RHM) in March 2007, just before the credit crunch and subsequent economic downturn. PFD has been facing an uphill battle since then, having to cover large interest payments, hefty bank fees and with the need to correct the large pension deficit.

Summary

Notwithstanding the above, the fundamentals do meet some of my criteria for a potential recovery stock, as follows:

• Low PSR (currently 0.12 [pr])
• Positive operating margin (+4.68% on last results - see Blue Arrow [above])
• Low P/E (currently 2.86)
• Improving Newsflow re. disposals etc.

Some of the more bearish counterpoints included:

• Level of debt
• Pension issues
• negative cashflow in y/e 31.12.2011 (see orange line on key metrics)
• negative tangible book value
• slight fall in turnover

As usual, as a DIY-Investor, I am quite happy to weigh up the evidence and dip my toe in the water (buying my initial holding) based on my own judgement. So far, so good and I can see the potential for more upside on the share price.

Why not take a look and see what you think about the recovery prospects for PFD?

Be sure to let me know your verdict!

Mick.