Perrigo Company

Perrigo Company (PRGO), has seen its stock hold up pretty well amidst the recent stock market sell-off.

The company, a Zacks #1 Rank (strong buy), which manufactures and distributes over-the-counter (OTC) and prescription pharmaceuticals, nutritional products and consumer products, is expanding as consumers switch from more expensive, brand-name products to cheaper items in a slowing economy.

Perrigo is one of the largest suppliers of branded products to retailers. The company supplies products in more than 15 categories and 500 formulas and offers analgesics, cough and cold remedies, and gastrointestinal and feminine hygiene products, as well as vitamins, dietary supplements and nutritional drinks.

Stock investors have been fleeing to quality health and drug company names, including Perrigo, during the market downturn. Perrigo has solid fundamentals.

The company recently paid $25 million in cash for Laboratorios Diba, S.A., a privately-held Mexican store-brand manufacturer of OTC and prescription pharmaceuticals. Perrigo expects the acquisition to add $15 million in annual sales.

Sales Grew 26% in 2008

In August, Perrigo reported its third straight quarter of record year-over-year sales and earnings. Sales rose 26% in 2008 compared to fiscal 2007. The company generated $248 million in cash flow in 2008.

Analysts continue to be bullish about Perrigo's future. 2008 year-over-year growth is expected to be 24.05%. Full year 2009 estimates are up 6 cents to $1.96 in the last 60 days. Estimates for the first quarter 2009 are down a penny to 42 cents in the last 2 months.

Perrigo has a forward P/E of 17.9. Its price-to-book is 3.6. It has a stellar 1-year return on equity (ROE) of 17.5%.

The company has surprised on earnings 3 out of 4 quarters by an average of 11.65%. It reports first-quarter 2009 earnings on Nov 6.

Read the full analyst report on PRGO