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Here’s why Patties Foods Limited has jumped 5% today

Shares of the embattled Patties Foods Limited (ASX: PFL) have managed to recover more than 5% today, climbing to $1.33, after the company announced it had recalled its ‘Nanna’s Raspberry 1kg products in light of a Hepatitis A outbreak, adding to the numerous products already recalled.

While five people have tested positive for the disease of the liver in Victoria and New South Wales, three more have now tested positive from Queensland. Given that the virus has an incubation period of up to 50 days, it’s possible more cases will be found in the coming weeks.

The products are sold nationally in supermarkets such as Woolworths, Coles and IGA. The company’s Managing Director and CEO, Steven Chaur, said the latest recall is a precautionary measure in the interests of public safety. While it is not known whether any of the recalls will have a material impact on the company or its earnings, it could certainly damage the brand’s reputation.

Investigations across Patties Foods’ global supply chain indicate that any contamination may have come from China, where the products are packed and sealed. The stock has fallen 5% since last Wednesday, while it remains 8.3% below its 52-week high, recorded just last month.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned. You can follow Ryan on Twitter @ASXvalueinvest.

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