Hello fellow BKL shareholders
For those that have seen a few of my past posts, you will know that I manage a my own portfolio with a minimum position per security of $500,000 AUD. I adopt a very low frequency approach and when I see a solid opportunity I back it with substantial capital and conviction.
In the past 36 months I have only made 3 allocations on the ASX, 1 in SHJ (which I thankfully exited before it crashed), the 2nd in SEK when it dipped into $11 region (since exited for a tidy profit) and the 3rd being this week where I picked up around 4000 units of BKL at $125.00.
I believe the BKL share price is a similar picture to COH when it crashed several years ago before moving up over 200%. They are both Australian iconic brands in the health sector (BKL being alternative I admit). Both stocks have experienced short term crashes because the market completely misunderstood the dynamics of the industry / business. I feel the market has incorrectly priced BKL, just as they did with COH several years ago.
BKL has low debt, decent profit margins, very smart management, and they return profits to shareholders and employees. Based on what I have researched, there is plenty of profit growth and expansion opportunities ahead despite the media trying to convince us otherwise lately. The Chinese won't stop buying vitamins from Australian companies, the people who can afford to buy vitamins for health benefits in China will find a way to buy them regardless of the government restrictions and rules. I'm not a health expert, nor am I a Chinese consumer expert, but I do look at common sense trends and the current trend is very positive for this alternative health sector in Asia.
I would argue that there is a margin of safety buying at these discounted share price levels ($125 area), which represents a circa 50% discount to price levels 12 months ago. The dividend remains appealing too.
I am confident BKL trades $180 again within 24 to 36 months and that would be a great return as well as any earned dividends in that time
Regards
A Y L
