Agree that the market is over-reacting, but I believe that BXB was being shorted on Monday and Tuesday. On Monday 22% and yesterday 13% of total shares traded were short sold. IMO this stock will rebound hard sooner or later. It's already happened today. Tomorrow it will probably dive because at the moment it looks like overseas markets will be considerably down but who really knows? We will know for sure tomorrow morning.
It's quite funny that bad news is bad news and is reported by the media but any good news however insignificant is not even mentioned. I notice that Chep secured a huge deal with a Turkish Automotive components manufacturer earlier this month. Did anyone hear about that? The answer is no. Why? Because bad immaterial news sells better than good immaterial news.
Obviously last Wednesday's massive decline in share price together with yesterdays was not enough so the Australian Financial Review reported today on p.18 that Brambles is in trouble. What a joke? The writer/editor Nabila Ahmed is hypothetical about everything. Most of what the writer claims are hypotheticals and rumour........
I also think that the market/insto's may think that the possible bankruptcy of GM may hurt Brambles. However Brambles exposure to GM is around 1-2% of total revenue. The whole Automotive industry exposure represents only 4% of total revenue and includes GM, Ford and Nissan.
Let us not forget that the possible bankruptcy of GM does not translate to reduced revenue for Brambles. GM together with Ford has just stated this morning to introduce some initiatives to spur demand for new cars including covering payments for new cars should one lose their job.
GM whether under its current or future structure will still be requiring the services of Brambles. Like Toll Holdings Brambles is a top class logistics company.
Brambles IMO represents excellent value to a prospective investor. Trading on a PE ratio of around 10 times.
It's a bad time for iGPS to go head to head with a market leader in this current environment. The togher the environment the harder it will be for competitors. The easier it will be for Brambles to increase market share.
DYOR but Brambles is at historically very low levels and delivers profits year after year.
BXB Price at posting:
$4.95 Sentiment: Buy Disclosure: Not Held
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