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BAL bellamy's australia limited

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Fundamentals, page-7

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nihilism

11,400 Posts.

565

11/06/15

13:55

Post #: 15449470
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Originally posted by Gongboy ↑

Things to consider - and very interested in views:
- main profit driver is organic milk
- almost all production is from Bega (BGA). BGA assumes production risk and BAL 'creams'off the profit.
- floated less than 12 months ago at $1:00 per share (only a small % of the company floated)
- FY 15 profit about 60% of prospectus estimate (8 mil versus 5 mil)
- at 8mil FY15, PE is 51 (prospectus PE was 19).

Questions (for comment):
- how much more production of organic milk is possible for BAL to increase supply sufficiently to justify a PE of 51?. Even if China has a a great appetite for organic baby milk, BAL needs the supply.
- why would BGA, which is the main reason BAL is successful, sit back and churn out more supply for BAL without either raisng their price to BAL, or setting up their own organic milk products and market directly?

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I'm pretty sure BAL is not organic milk but organic baby formula.. could be wrong.

BAL Price at posting: $4.30 Sentiment: Hold Disclosure: Held
1 Upvote

0 Great analysis

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Fundamentals, page-7

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