I am wondering if BUB is a good buy and at what entry price please.
A: I would say no, but I am a pretty conservative investor. Bubs Australia (BUB), a producer of goat milk products for the infant market, is caught up in the whole dairy/China/organic foods “bubble”. That’s not to say that sales aren’t growing rapidly – but its recent share price lift-off just looks like momentum buying. It has run up very quickly from $0.80 to almost $1.20
According to its cash flow statement lodged on Wednesday, revenue reached $7m in March. Annualizing this takes it to $84m. With a market capitalization of around $610m, that is a ratio of around 7 times market cap.
If I had to price level, I would say a low closer to the recent placement price (just a few weeks ago) of 65c.
Only one of the major brokers (Morgans) covers the stock. Admittedly they are a few weeks old with their valuation, but they put it at 45c in early March.