BGA ANN Play

BGA dipped down to $5.64 coming off from huge highs. It is very likely to have a momentous build up to the ANN on Wed 24th February 2016. $5.66 according to charts is a strong point of resistance and a very probable price range for a strong bounce, given the limited liquidity of the stock. Online some have placed a price target of $8. However it reached there prior to the newest ANN. The newest ANN if positive should push Bega back in and perhaps above $8 depending on their latest figures.

Possible announcements include:

Revenue and Profit upgrade
Forecast for joint baby formula venture with Blackmores
Guidance as to where the excess capacity moved over from Coles will go [already hinted at value added products].

Bega Cheese has an excellent balance sheet has recently tapped into its new processing plants for increased production.

PE is around 40 on CMC markets, although the media has clocked it at around 60.

There may be a lot of upside to the share given that it hit $8 in January after the dairy sector fell in December. It has been a solid performer and a great inter-day trading stock. Spread of around 40c which is great.

Any thoughts or input would be great. It is the last of the IF stocks to report this quarter so may receive additional volume in that regard as other stocks such as A2m, BAL lose limelight temporarily.

JF