As often happens, I find myself agreeing with noomxx -- these broker targets are meaningless and hold zero predictive value. I've even read academic studies which prove how useless they are. They usually jump on a share price trend and extrapolate it, rather than looking at the actual value of the company. If these brokers had any ability to forecast the future, they would have had price targets of $1.37 when the share price was at $2.10 a week ago.
My BBN average price is in the low $2s. I've bought four or five very small parcels which hasn't affected my portfolio much. However my ego has taken a battering. I was totally wrong about how BBN would hold up with decreased retail spending and that annoys me. I have always wanted to hold BBN shares, but have considered them too expensive. I thought the mother and baby sector would be fairly robust, and that fears of profit downgrades would be proven incorrect. Unfortunately, I jumped the gun and started to build a position too early. It was me who turned out to be incorrect. Oh well, it happens. I would never claim to have any special share market knowledge or skills. I was (and am) prepared to average down further over the coming months.
I will be interested to see any changes of substantial holding notices in the next few days. If Allan Grey or Argo Investments (deep value, contrarian, conservative investors) show up, it will put my mind at ease. They often show up on stocks like Woodside, Tassal or Ansell when the herd is selling. There has certainly been enough volume over the past couple of days for a substantial position to have been taken. Hopefully it hasn't been all retail investors selling to retail.
At some point (probably not any time soon!!) the market will start to look through interest rates (which have most likely peaked) and constant talk of recession, and will start looking at rate cuts and more money in the economy. Where the BBN share price will be by that point, I hate to think!
I was looking at Beacon Lighting (BLX)'s share price on the weekend -- before the current BBN announcement. I was surprised at how closely it tracked with BBN's despite the absence of BLX profit warnings. I do not hold BLX but it's on my watchlist. It reflected a general malaise in smaller retail stocks which is industry-wide, not just company specific. So I reject the argument made on this board over the past few months about a collapse in the birth rate in Australia. The argument was made by someone who admitted (in a moderated post) to have been short selling BBN stock. Good on him -- he made a profit. However the argument is ridiculous and false. Non-holders and short sellers who appear on a forum to talk down a stock are rarely received well. The argument that BBN is a proxy for younger demographic mortgage belt customers, however, is a good one, and an argument I am happy to listen to.
There is a low correlation between the sale of baby goods and ceiling lights & fans
Australia is expecting a million new migrants over the next couple of years. I have no proof of this, but I suspect migrants' birth rates are higher than Australian citizens'. Many will bring babies and small children with them. All retail stores will benefit -- especially in western Sydney, and Melbourne. Baby Bunting is still the sector leader. Penetration of the Australia and NZ markets is low and we have plenty of areas to expand into.
For what it's worth, over the past 30 calendar days, Commsec says BBN's buy/sell ratio amongst its clients is:
It will be interesting to see how this figure looks in a few days' time. I would love to see someone post a report (Bloomberg terminal?) of which institutions are buying and selling BBN this week. Most retail investors don't have access to this information.
That said, the current announcement is a worry. There was nothing good about it. Things could well get worse from here. I have no form in getting this stock right and probably shouldn't be listened to! Perhaps the new CEO was setting the bar low and so-called clearing the decks to give himself some breathing space by giving himself an easy target to meet. Let's hope so. The sales revenue in the past four or so weeks is concerning. It seemed okay up until then. We shall see.
BBN Price at posting:
$1.37 Sentiment: Buy Disclosure: Held
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