People are buying a company that will be ex-growth on 19x earnings, with no specific guidance other than not achieving YOY growth. A company that has just achieved 12m NPAT on shrinking margins. Even if they doubled that result, and made 24m each Q, they make a 16% loss on last years NPAT. How is this a buy? The Chinese growth story everyone loves is a minor part of Blackmores earnings model, they make the vast majority of their money in Australia, and their market here is decreasing on worse profit margins. 19x earnings is too high. & what shorters are going to cover? They've already covered, BKL is back to 27th on the list. Shorters are more likely to re-enter. I'm staying well away - this stock is vastly irrational, and could easily post a 15% miss/loss on NPAT from last year at end of FY17.
BKL Price at posting:
$105.74 Sentiment: Hold Disclosure: Not Held
