bal is back, page-70

My personal opinion is that BAL should be trading at a premium to A2 (both good companies), just on profitability alone. A2 has a lot of upgrades priced in. There is still a lot of doubt around BAL due to the lack of announcements and already high share price/performance. BAL & A2 are basically valued the same by the market (a2 = 1.2B, BAL = 1.35B), not long ago A2 was valued higher than BAL...

There will be two important things to look for in H1 result, one is net margin & two is anything around supply. For example, take a look at the detail on the recent FIL substantial change notice, they were big sellers (most of Nov)leading into Fonterra announcement , then boom, flipped and became big buyers all the way up to $15.29, now second largest shareholder at 7.5%.

When BAL's customers stop limiting people from buying the product, we will see the true size of the market. My feeling is that BAL could be selling $350mill + today if they had the stock. So sales of $400 mill+ are only a matter of supply at this point (look out FY17!). Of course things can change, so we need to be on the look out for regulatory change, and organic milk supply issues.