Question 1: We are considering buying some Blackmores (BKL) shares for our SMSF.
The current price near $91 appears a bit overpriced and we would look to get in around $88-$89 if they retreat further. Your thoughts on the quality and long term prospects for BKL would be appreciated.
Answer (by Paul Rickard): I can’t quite see the hurry to invest in Blackmores (BKL). It is still trading on a multiple of 25.5x FY19 earnings and 22.9x FY20 earnings. At a recent update in late May, the company confirmed “modest year on year revenue growth” and “second half NPAT weaker than the first half”. It is still without a CEO, and another key member of the Executive team resigned recently.
After being a “star” with the brokers and the market, it is now on the outer. According to FN Arena, of the 6 major houses that cover the stock, there are 5 neutral recommendations and 1 sell recommendation. The consensus target price is $86.02 – about 3.5% lower than the last price. Range is a low of $82.50 up to a high of $95.00.