Any stock that loses a significant amount of value in a short period of time warrants a closer inspection. It could be that the company is in serious trouble and worth staying away from. But it could be that the reaction has been overdone and it’s now a real bargain value stock.
Here’s one I’ve spotted that I think is the latter. Details of the firm ( ) is a well-known company. It’s an international consumer goods business that owns brands such as and .
As such, it mainly operates in the hygiene and beauty area, but has a broad portfolio. In most cases, such consumer goods businesses do well. After all, the price level of many products is low, meaning these aren’t luxury goods.
Further, given the everyday nature of many items, these are necessities rather than discretionary. So even during economic uncertainty, the share price should be steady. Yet for PZ Cussons, the stock is down 43% over the past year.
In fact, last month it hit low levels not seen in over a decade! Issues in Africa A large problem is its exposure to emerging markets. For example, around a third of total revenue comes from African operations, with Nigeria having the largest share. Yet the local currency has depreciated heavily.
In a report during February, the firm said the currency had lost 70% of value in the past year. This has really hurt the business. For example, in the half year report released earlier this year, revenue came in at £277.
1m, a fall of £59.8m from the same period in the pr.
