Some commentary from one fund manager this afternoon in their monthly report (Contrarian Value Fund ASX:CVF). They have done very well over the last year:
The largest detractor was our residual position in Bellamy’s Organic (BAL.AU), which fell 29.2% in the month. There is building doubt over the timing of the award of a Chinese label manufacturing licence, which would allow the Company to sell its wares direct to merchants in China, under Chinese language labelling. Currently the majority of Bellamy’s products sold in China are carried into the country by resellers. We have added to the position on the recent falls; if you like something and it falls 30% then unless something material has changed you ought to like it even more. The other factor here is that the industry is prone to profit surges by nature of the existence of a large and opaque distribution channel, most especially in China, which cause divergence between apparent and actual consumption rates.
BAL Price at posting:
$9.78 Sentiment: Buy Disclosure: Held
