At the current share price of $9.74, the company is worth circa $1.1 billion. Given BAL will achieve revenue of at least $500 million annually by 2021, along with no debt and millions in cash, as well as new products and growth opportunities, do you really value the company at $8.00???
The RSI is currently 41, suggesting BAL is way oversold. Huge support has been built between $9.20 and $10.00. SAMR approval (which could be any day now) will see the shorts closing their positions and running for the hills.
And you mention the myriad of other brands represented; how many are organic Australian infant formulas? The rising middle class in China want nothing but the best for their children. That’s why Bellamy’s literally fly off the supermarket shelves in Oz and distributed via the daigou channel. Quality will always win over quantity.
Even a small percentage of market share in China would equate to many millions in revenue once SAMR comes through. And that’s just China. Revenue from expansion into Vietnam, Indonesia, etc has not been factored into future guidance. With only 10% growth forecast for FY19, any announcement related to a profit upgrade would send the SP flying given the volatility of this stock. Definitely a under-promise, over-deliver figure used by the company here.
Patience and common sense will win out in the end.
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