BKL - Blackmores Limited

[trillionaire#1]

I remember taking a keen interest on BKL when it plunged down to $20 .
There seemed to be so many new competitors like swisse that i got cold feet
and before long it was $26. Ive mised the boat i thought at the time

 

[skc]

Got them from Commsec. Was last year's figures.

Didn't bother opening up their latest annual report so maybe shouldn't comment, but yea... it's not going to double every couple of years and take over the world as its share price growth suggests though.

Last year's figures are so... well, last year.

NPAT = $46.6 was about 70% higher than last year. It just needs to grow at this rate for a year or two and the market cap isn't that demanding.

Obviously the growth isn't a foregone conclusion... but the path there is certainly conceivable and realistic.

I remember taking a keen interest on BKL when it plunged down to $20 .
There seemed to be so many new competitors like swisse that i got cold feet
and before long it was $26. Ive mised the boat i thought at the time

Same. I was put off by the relative low liquidity, and the confusion that I experience everytime I set foot in a Chemist Warehouse store.

Vitamins and supplement has to be the most confusing retail category. A retailer (or brand) who could crack that would do quite well I think.

 

[luutzu]

Last year's figures are so... well, last year.

NPAT = $46.6 was about 70% higher than last year. It just needs to grow at this rate for a year or two and the market cap isn't that demanding.

Obviously the growth isn't a foregone conclusion... but the path there is certainly conceivable and realistic.

From Penguins of Madagascar:
After rejecting nature, surviving a steep fall, slap a few sea lions to rescue a penguin egg... they ended up on a drifting iceberg.

Captain penguin turns to Kawowski for their chances... 95% chance doom but 5% chance of adventures and glory like no penguins have gone before...

Drifting into the sunset, Private asks: Where are we going Captain?

Captain: The future boys... The glorious future.

-----

At $118 today... the future does look glorious.

But as with all dreams, any cloudy skies and it's abandon ship.

----

On a more serious note... there is just too much that could go wrong here. Doesn't mean it will go wrong, but chances are it will.

One is if BKL were to do similarly well next year as it does last year... its price won't remain where it is but will probably double. Which is a good thing.

But how do you double your sales? How do you cater for the increased in volumes?

Can't crank the current plants 24/7 forever. You have to make investments. New sites, new PPE, new employees, new sales team and international offices and staff.

These costs money, will take a few points from the bottom line for sure.

Then if the Chinese economy tank... I don't know.. maybe they can convince the Chinese that Blackmores can be taken with alcohol.

But yea, if new competitors get into the game; if current competitors get their act together; if Chinese-owned and Chinese-based herbal and supplement companies with secret, lost, recipes and well funded labs opens up... You do realise that the Chinese/Asians have been playing with these supplements and herbal remedies for centuries right?

 

[skc]

At $118 today... the future does look glorious.

But as with all dreams, any cloudy skies and it's abandon ship.

----

On a more serious note... there is just too much that could go wrong here. Doesn't mean it will go wrong, but chances are it will.

One is if BKL were to do similarly well next year as it does last year... its price won't remain where it is but will probably double. Which is a good thing.

But how do you double your sales? How do you cater for the increased in volumes?

Can't crank the current plants 24/7 forever. You have to make investments. New sites, new PPE, new employees, new sales team and international offices and staff.

These costs money, will take a few points from the bottom line for sure.

Then if the Chinese economy tank... I don't know.. maybe they can convince the Chinese that Blackmores can be taken with alcohol.

But yea, if new competitors get into the game; if current competitors get their act together; if Chinese-owned and Chinese-based herbal and supplement companies with secret, lost, recipes and well funded labs opens up... You do realise that the Chinese/Asians have been playing with these supplements and herbal remedies for centuries right?

Perfectly logical arguments. In conclusion... never buy anything that involves the future.

 

[luutzu]

Perfectly logical arguments. In conclusion... never buy anything that involves the future.

I didn't say that.

Future is good. Just be careful if the price you are paying is indeed the future.

Sometime it could just be paying for the hope that that future is the future.


Anywho... if BKL hit similar sales growth again next year, its price will probably hit $200. I haven't look at the company so I can't really gauge if that's likely or not... probably it is... will it still be likely in a few years time? Well it hasn't been able to in the past few decades... maybe things have changed for good?

But that's just me... seeing the carnage this past couple weeks... There's plenty I could spend my $1.5, $1.8 billion on than a supplement company that returns $47M in its best year, and if all goes great gives me average of $80 to $100M thereafter.

 

[SuperGlue]

Perfectly logical arguments. In conclusion... never buy anything that involves the future.

Haha.

Isn't the market all about the future.

Futures.....

We buy today for tomorrow.

 

[McLovin]

Yikes!

Started the year at $35. Went through $50 at the start of April. Went through $100 in late August. Just went through $200.

Where does this end?

I'm forever blowing bubbles,
Pretty bubbles in the air,
They fly so high, nearly reach the sky,
Then like my dreams they fade and die.
Fortune's always hiding,
I've looked everywhere,
I'm forever blowing bubbles,
Pretty bubbles in the air.

 

[Ves]

Where does this end?

The gut feeling tells me in tears. Well, then again, that's already happened... I looked at this around $20 last year.

 

[skc]

Anywho... if BKL hit similar sales growth again next year, its price will probably hit $200. I haven't look at the company so I can't really gauge if that's likely or not... probably it is... will it still be likely in a few years time? Well it hasn't been able to in the past few decades... maybe things have changed for good?

You called it!

Where does this end?

Probably need a share split soon. The number's getting too big. I have had to widen my spreadsheet's price column to trade it

The gut feeling tells me in tears. Well, then again, that's already happened... I looked at this around $20 last year.

I looked at it at $40m but didn't really follow through with the research. Have a friend who's in the vitamin business in HK and it's a highly competitive category. But I guess the rising tide was very strong...

 

[Ves]

I looked at it at $40m but didn't really follow through with the research. Have a friend who's in the vitamin business in HK and it's a highly competitive category. But I guess the rising tide was very strong...

That was my thoughts from the outside looking in.

There's a common mistake in valuation and you often can pick up on it when looking across entire sectors, I think Aswath Damodaran calls it the "Macro Delusion" in which people that are looking (and also those on the inside) at rapidly growing industries, forget that over-confidence is contagious, and cumulatively the whole industry over-estimates future returns.

Interesting to see if it applies here. I notice Blackmores isn't the super-bullish company on China's prospects in this space.

 

[luutzu]

That was my thoughts from the outside looking in.

There's a common mistake in valuation and you often can pick up on it when looking across entire sectors, I think Aswath Damodaran calls it the "Macro Delusion" in which people that are looking (and also those on the inside) at rapidly growing industries, forget that over-confidence is contagious, and cumulatively the whole industry over-estimates future returns.

Interesting to see if it applies here. I notice Blackmores isn't the super-bullish company on China's prospects in this space.

I'm surprised it didn't go to $300 given China just repeal its one-child policy.

Vitamin-infused milk and cheese... quite clever. But i think 90% of Chinese couldn't afford normal cheese or milk or safe food let alone the crazy stuff from Australia.

 

[McLovin]

I have no idea what one does with vitamin E cream but this stat is pretty amazing.

Blackmores floated on the ASX 30 years ago, and for most of that time the company sold 3000 tubs of vitamin E cream a month. In November 2015 the company sold 800,000 tubs of vitamin E cream.

Read more: http://www.afr.com/business/blackmo...-china-scramble-20151201-glcdee#ixzz3t2yiKc9U

 

[Gringotts Bank]

I have no idea what one does with vitamin E cream but this stat is pretty amazing.



Read more: http://www.afr.com/business/blackmo...-china-scramble-20151201-glcdee#ixzz3t2yiKc9U

Scar tissue softening, skin health generally.

 

[infotyte]

Wow it is off again...nearly $200!

 

[PinguPingu]

TIMBEEEEEEEERRRRRR


http://www.smh.com.au/business/chin...eign-goods-could-be-over-20160410-go2t39.html

 

[Gringotts Bank]

Traded it... from the open! And out for a tiny profit. The action is finished and will flatten off back to about 165, imo.

 

[pixel]

TIMBEEEEEEEERRRRRR


http://www.smh.com.au/business/chin...eign-goods-could-be-over-20160410-go2t39.html

an 11.9% value-added tax has been levied on foreign goods purchased via foreign websites, where apparently much of Murray Goulburn's products are sold to China.  What is a little more concerning is one paragraph I have found suggesting that under the changes, health foods will require regulatory approval which may cost up to $200k per item and can take up to four years.

That news item (thanks Sue ) would have spooked many a retail trader, causing the initial panic selling.
Now, at lunch time, some semblance of sanity has returned and Blackmores are back at recent averages.



Unfortunately, I missed the dumping and a quick 15% profit.

 

[skc]

Unfortunately, I missed the dumping and a quick 15% profit.

Same here. BKL is quite a difficult stock to trade. It's spread can suddenly go to $1 without warning. There's also no borrow anywhere so I couldn't profit from the morning dump either.

Now... Name another stock that can do $50 range in 2 days. My mind almost can't process so many digits in the share price!

I made some gains trading A2M and BAL... both suffered from delayed reaction yesterday. They were both easier to trade in terms of liquidity and spread. I also managed to trade the rebound in BAL and BWX. Out of both for now.

I don't really think the Chinese government has really carefully considered the finer details of the regulation changes. There will be a period of uncertainty before the dust settles.

 

[Gringotts Bank]

Traded it... from the open! And out for a tiny profit. The action is finished and will flatten off back to about 165, imo.

 

[Value Hunter]

At today's closing price of $148 the stock will actually look inexpensive if they can deliver a strong FY2017 profit.