Vitaco IPO, page-11

My analysis as follows:
BENCHMARKS
Have used Blackmores and Bellamy in Australia and GNC and Vitamin Shoppe in
USA.
Both USA companies have retail stores whereas Australian benchmarks involved
in wholesale only. Bellamy quarter the size of Blackmores and Vitaco half
the size of Blackmores . All Australian businesses significantly smaller
than USA benchmarks .
PROFITABILITY
Vitaco earns an EBIT to Sales margin of 11 % versus other players in the
range of 8 to 17%.
RETURN ON ASSETS
Vitaco earns a return of 24% versus other players in the range of 20 to 38%.

BUSINESS CONCLUSION
Assuming 2016 forecasts are met then Vitaco is an excellent business and
compares well with the above benchmarks.
MARKET PRICING
This is where the wheels come off.
Blackmores and Bellamy at current prices are outrageous .
USA based GNC and Vitamin Shoppe at current prices are expensive.
If Vitaco gets sold at the top of the range then it is 50% of the price of
Blackmores and Bellamy and about 25% more expensive than USA benchmarks.
If Vitaco gets sold at the bottom of the range then it is 42% of the price
of Blackmores and Bellamy and about 7% more expensive than USA benchmarks.
SUMMARY
Regardless of pricing , Vitaco is more expensive than USA benchmarks. This
always makes me nervous.
Regardless of pricing it is much cheaper than Blackmores and Bellamy.
However, as we know, Blackmores and Bellamy prices have increased
dramatically from purely being expensive to outrageous.
CONCLUSION
I always
feel very nervous buying a good business that is expensive and I am relying
on outrageously priced benchmarks to make money on listing.
For me this is worth a small to medium punt depending on how bullish one is
feeling .
I will go for a small punt.
What is everyone else doing ? Keen on thoughts as always.