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PBP - Probiotec Limited

Discussion in 'Stocks I-P' started by Miner, Mar 3, 2020.

  1. Miner

    Miner

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    Thought to start a new thread and thanks to @Joe Blow for giving guidance to start a new thread. How wonderful this man Joe is who lives in the centre of the universe and never sleeps to keep track on stocks around the world :). Thanks, Joe.
    I found some interesting about PBP - It has been heavily recommended by Shaw and so I dug into it.
    https://www.asx.com.au/asx/share-price-research/company/PBP
    Look at this posting on ASX today by PBP.
    Share trading by CEO, Very innocent posting - financial needs etc usual stuff.
    But who posted the news - no one else but the CEO himself. Whom to contact - of course him.
    Who has the conflict of interest? Of course not the CEO.
    Why not the name of company secretary with the same surname and also holding the CFO title was given here for making query?
    Who brokered the deal - Shaw Partners. No wonder they were recommending people to buy it.
    Having said all of the above, let me be fair and reasonable.
    Look at the financial performance published - all very nice. So the CEO has sold off only after formal publishing of the performance - I should not hold the sale being unfair. Of course, CEO invests on the company to have some cash-out. So there is nothing improper here.
    https://www.asx.com.au/asxpdf/20200224/pdf/44fckp50rbjskh.pdf
    I am only referring to the governance part of it.
    A bit more backwards.
    Look at this share sale
    one on Nov 15, 2019- 3% unloading.
    https://www.asx.com.au/asxpdf/20191115/pdf/44bmkgxfkgp8rd.pd
    One in October 2019 : https://www.asx.com.au/asxpdf/20191115/pdf/44bmkgxfkgp8rd.pdf -
    On the website :
    It appears to be a family-held company with the CEO, Secretary all with same surname.
    r Geoffrey Ronald Pearce Chairman
    Mr Wesley Stringer Managing Director, CEO
    Mr Greg Lan Non-Exec. Director
    Mr Jared Stringer CFO
    Company secretary
    Mr Jared Stringer Company Secretary
    disclaimer - do not hold. Thinking of getting into it but now doing a back step towards sideline to watch .
     
  2. Dona Ferentes

    Dona Ferentes

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    Agree about Lord Joe. And the sentiment about a second tier broker pushing a minnow is often a Red Flag. Not always, but frequently.

    Came across this company as I'm fishing for some new idea in microcap space. Mirrabooka (MIR) has culled nearly 2 dozen smaller holdings of what they term interesting early stage companies (...the Financial Year saw Mirrabooka further consolidate its investment portfolio from 63 to 52 holdings. Tough calls were required on exiting some interesting early stage companies, as funds were required to buy higher quality companies that were also sold off heavily during the year and are better placed for the deteriorating economic outlook). So I had a look at WAM MicroCap (WMI), finding it to be similar in style (looking for undervalued growth opportunities) with the conclusion there is quite a lot of overlap. One that was different is PBP

    PBP is a "brand owner, manufacturer, marketer and distributor of a range of prescription and over-the-counter (OTC) pharmaceuticals, complementary medicines and specialty ingredients. The Company owns four manufacturing facilities in Australia and distributes its products both domestically and internationally".

    The company has been around for a while, has had a good 5 years of growth, organic and by acquisition.. But it's small and, as you point out, run by a tight coterie (which can be beneficial with alignment to shareholders, or detrimental when run as a club for the insiders). Sales are up and earnings quality is there as metrics like EBITDA and NPAT increase at a greater rate. There has been a series of acquisitions and also a major spend on new plant that should deliver cost savings and operational efficiencies.

    But, realistically, I can't see a moat for their products. Supermarket shelves and 'healthfood' stores offer a plethora of product, there seems to be a new brand every other week. Also, the "Asian market" angle, of growth through leveraging off Aussie quality and origin would have taken a knock recently with Covid.

    (don't hold; probably seen too many similar stories to want to get on board)
     
    Last edited: Jul 14, 2020
    Miner likes this.

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