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BKL - Blackmores Limited

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Buffettology "a company can earn more money on retained earnings than the shareholder ... the shareholder is better off if the company retains profits and does not pay them out in dividends." - says it all really Unfortunately, a lot of people don't see retained earnings as earnings attributed to the shareholder, provided the company can compound the retained earnings in the same or better performance in the next corresponding year (RoA)
 


Well said.

Perhaps some companies are just down right too afraid to retain more earnings. Or in the case of many it is easier to return money to shareholders than try find something to do with it.
 
TheRage said:
Well said.

Perhaps some companies are just down right too afraid to retain more earnings. Or in the case of many it is easier to return money to shareholders than try find something to do with it.
Click to expand...

Exactly.

Blackmores is expanding, particularly in Taiwan.

What if it retains 100% of its earnings? It cant just ramp up its expansion. Their management has a plan and knows how much it needs to retain in order to acheive this.

BKL is definately a long-run growth company.

Good to see more fans of the masters work and not just commodity quick profit traders as this site appears to be.
 

You have to look at risk, is BKL a virtually riskless company like google (risks to EPS)?

thx

MS

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 104.1 117.6 122.8 135.2
DPS 81.0 92.8 97.0 106.7
 
Good results. EPS growth at 20% despite impact of high Aussie dollar on international supply chain. I like the way management are growing this baby.
 
Solid 3 qrt result. Net debt has increased considerably though due to construction of new facility. Debt/ Equity now at 30%.
 
Have been monitoring BKL for a while as its a stock i do like the look of.

Unfortunately its been trading at a price ive deemed just too high atm.

Anybody got any suggestions/calculations for IV for BKL atm, and through the year ?

For the people holding it already, what price would entice you to top up in 2011 ?
 
I've had this one on a watchlist for a while, waiting for a dip. It's dipped over 4.5% in the last few days. I can't see any announcement or news to explain the downturn, apart from API's AGM on 21/1 and a sharp selloff and recovery in their share price? Am I missing something?
 

It interests me too, throwing it in my quick & dirty DCF valuer i get around $25 as current value.

I wonder about competitive advantage also, not a lot I can discern in that market.
 
I think BKL's best days are behind it.

They're not generating super-normal returns on capital any more. ROIC has been declining in the past five years (if my calcs are correct) and they have had to spend larger and larger proportions of their revenue on promotion expenses (ie. advertising, discounting, samples...).

Something to keep in mind. Looks like the competition is heating up in their sector and they have had to start fighting harder. That's what the numbers tell me.
 
They've been spruiking them a bit on YMYC. Apparently they've plans to expand into Asia, which would be another huge market for them.
 
What could be a factor to consider is the growing awareness amongst the population that these 'natural' products are not all that natural at all. They are manufactured in factories, just as prescription drugs are, without the assurance of prior proper testing.
 
Any thoughts on this stock after a sell off today on results?

Has been on my watch list for years, but never bought.

Had one of the best charts around until today.

Run out of growth?

Sales up, but margins down?
 
chops_a_must said:
Any thoughts on this stock after a sell off today on results?

Has been on my watch list for years, but never bought.

Had one of the best charts around until today.

Run out of growth?

Sales up, but margins down?
Click to expand...

BKL broke the crucial 29.50 range support today @29.01 close. It looks in trouble now. Up trend looks broking, if I currently hold this share, I'll seek to exit ASAP.
 
The issue I feel is that two major customers account for 33.50% of there total revenue, and 43.47% of the Australian segment.

These customers have massive market share and power and are squeezing their shelf space and margins - on top of that Blackmores need to invest more money (advertising and promotional material) to maintain their market position.

Sales in Asia have been growing nicely but these two biggest customers continue to take a bigger slice of the revenue pie (38.99% (FY11) to 43.47% (FY12) in AUS Segment and 30.79% (FY11) to 33.50% (FY12) in total revenue)
 
Supermarket shelves are still full of BLK products, but their packaging hasn't changed in ages. I also think consumers get wise to what works and what doesn't after a while. Some of their products would work as advertised, but there would be a bunch of them that wouldn't be of any health benefit at all. For example, who in their right mind would buy magnesium supplements?

It's a huge market to tap, the placebo market. They just need to change their packaging to keep it fresh and new looking....IMO
 

Folks that are magnesium deficient?

It actually helps with the uptake of Vitamin D from memory, I'm not a nutritionist so I could be well off the mark there.
 
Daffyduck said:
Folks that are magnesium deficient?
Click to expand...

chops_a_must said:
It stops cramping.
Click to expand...

Lol... Alternate is to drink some tonic water which also helps ease cramping. I do that with Gin

Vitamin / supplement is a massive category and it's confusing as hell the last time I went to a Chemist Warehouse type discount outlet. I think there's a lot to be gained from clearing that up with better display, new technology like a "what's your problem" type app etc. There's also plenty of opportunity for increasing direct sales - although that's always a tricky one as the distributors will probably be unhappy about you undercutting them.
 
chops_a_must said:
It stops cramping.
Click to expand...

Thanks Chops...I suffer from cramping occasionally and a couple of bottles of Gatorade usually fix it up, i thought it was the potassium but now maybe i can look for a magnesium supplement!

CanOz
 
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