Cramer Sees Plenty of Upside in Perrigo (PRGO) With PBM Acquisition
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Price: $10.22 -1.83%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 10.1%
Revenue Growth %: -4.7%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 10.1%
Revenue Growth %: -4.7%
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Jim Cramer believes that Perrigo (NASDAQ: PRGO) is a good buy, particularly after the company announced the purchase of PBM on March 23, 2010. The purchase by Perrigo of the private-label baby food maker, was in a transaction valued at $808 million.
The markets also approved the merger, sending the shares up about 12% on the news. The stock has been up 27% since Cramer recommended it on February 9, 2010.
Cramer says that Perrigo's fundamentals were strong before the merger, but he believes that the stock is even more compelling. The reason, at least one of them, why Cramer is a bull on the stock is that the spectrum of retailers, from larger supermarkets, to mom & pop's, are making the switch to private label brands in order to deliver high-quality products to their customers, with a reasonable price to boot.
Last quarter, Perrigo reported an EPS of $0.70, beating expectations by $0.04. The current deal is expected to add $0.10 to FY10 earnings. Cramer believes that this addition strengthens Perrigo's lineup even more, making it a formidable powerhouse with plenty of room to grow.
The markets also approved the merger, sending the shares up about 12% on the news. The stock has been up 27% since Cramer recommended it on February 9, 2010.
Cramer says that Perrigo's fundamentals were strong before the merger, but he believes that the stock is even more compelling. The reason, at least one of them, why Cramer is a bull on the stock is that the spectrum of retailers, from larger supermarkets, to mom & pop's, are making the switch to private label brands in order to deliver high-quality products to their customers, with a reasonable price to boot.
Last quarter, Perrigo reported an EPS of $0.70, beating expectations by $0.04. The current deal is expected to add $0.10 to FY10 earnings. Cramer believes that this addition strengthens Perrigo's lineup even more, making it a formidable powerhouse with plenty of room to grow.
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