The 2 milk formula companies (A2 Milk and Bulbs) look now worth watching. They have a different size (A2 Milk much bigger) and a different profile (A2 Milk more regular growth vs recovery for Bubs). Their market is really interesting, as there is a high value for existing brands, given all the past safety issues both in China and the US in these markets.
Bubs, in particular is interesting for 2 main reasons : - its accumulated tax losses corresponds to a potential tax saving of 11 c per share (share price of 11 c), which probably explains why the stock bottomed recently at 9.5 c, - the company has just published a significant cash flow from operation for Q2 25, not explained by one offs, but by several major elements (sales growth, strong gross margin improvement and significant cost cutting). The company remains cautious for the next quarters, but we can see that they are on a positive trajectory. The main question is whether they will get the permanent approval for the US market (expected in Oct 25).
