The team at Ord Minnett think that Bubs infant formula company could be an ASX small cap stock to buy now.
The broker highlights that after getting rid of its previous wealth-destroying management team, Bubs now looks well-managed and positioned for a successful turnaround.
It said after eight years, several false starts including a costly one into China, a sacked founder, a failed board spill, and a staggering $316 million in equity injections, is it safe to mention the name Bubs in investment circles?
We are of the view that it is.For any investor that has previously written-off the company, we believe it is time to revisit Bubs get exposure to what we forecast to be an outstanding 2025 turnaround story.
Bubs is currently displaying all of the essential ingredients for a successful turnaround, i.e. anew and competent management team that has had enough time to steady the ship, a good product with sufficient gross profit (GP) margins, and a multi-year double-digit growth profile.
Ord Minnett recently initiated coverage on Bubs with a buy rating and 20 cents price target.
This suggests that upside of over 70% is possible for investors over the next 12 months.
BUB Price at posting:
13.0¢ Sentiment: Hold Disclosure: Held
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