I recently purchased VTG (Vita Group) for $1.64 (by my calculations I was buying VTG at a discount to its IV). The price for VTG has dropped to $1.175. My question is: have I been the victim of a "value trap"? (VTG has recently purchased a new business, but I thought VTG’s business fundamentals had not changed).
Answer (Paul Rickard)
Probably. Like any model, intrinsic value has its flaws. The only broker (Morgans) who covers Vita Group (ASX Code VTG) has a target price of $1.54 on the stock, but a hold rating. Like him, I am struggling to understand the strategic rationale for the Clear Complexions acquisition.