https://uk.finance.yahoo.com/news/think-uk-shares-could-triple-115019823.html19 Dec 2020 13:18
From Yahoo Finance 1/12/2020.. DYOR as usual
Premier Foods (LSE: PFD) has been a challenging investment to hold over the past two years. However, over the past 12-months, the corporation has seen a surge in demand for its products.
This has produced some much-needed cash flow for the company, which has allowed it to reduce debt and reduced its pension obligations. Now, the business looks well-placed to grow for the next few years.
I think 2021 could see a significant re-rating for the stock, which has commanded somewhat of an uncertainty discount over the past few years. Profits are expected to hit nearly £90m in 2021. That’s the highest level since the financial crisis. Despite this, the shares continue to trade at a discount of around 50% to their market average.
On top of this, the market doesn’t seem to me to truly appreciate Premier’s long-term growth potential. Similar businesses in the US are trading at significantly higher valuations, which suggests to me the stock could double or triple in the near term.