Bega – FY20 Earnings

Bega Cheese is under Algo Engine buy conditions following the recent signal at $4.50.

FY20 Full year earnings exceeded consensus and the key numbers are;

Revenue increased by 5% to $1.5 billion
Operating cash flow $138 million
Net debt reduction by $52 million to $236 million
Export sales increased 15% to $523 million
Inventory reduction by $15 million to $257 million
Normalised EBITDA decreased by 2% to $103.0 million

Bega Cheese – Rallies 15%

Bega Cheese switched to Algo Engine buy conditions back on the 15/6 at $4.50. Following a retest of the initial entry level this week, Bega then rallied 15%.

We’ve seen other food-related companies report strong earnings with an increase in stay at home cooking, supporting industry fundamentals. Despite this, we traded out of BGA in Friday’s session and locked-in the gain.

1H20 earnings showed mixed performance and we’ll be reviewing the full-year results when announced in August.

ALGO Buy Signal For Bega Cheese

Our ALGO engine triggered a buy signal for Bega Cheese into yesterday’s ASX close at $6.85.

This “lower high” pattern is referenced to the intra-day low of $6.47 posted on April 18th.

Shares of BGA have dropped over 10% since the company announced an institutional share placement to raise $200 million to reduce its debt and initiate a share buyback plan.

The share price looks technically oversold at current levels and we see solid investor support in the $6.50 area.

Bega Cheese

 

 

 

Bega Is Looking Better

Shares in Bega Cheese Ltd are up .75% at $6.75  after UBS released a positive market note on the company over the weekend. 

BGA had dropped about 8% since the half-year results released  last Wednesday, despite an improvement in all key financial metrics over the previous corresponding period.

However, it seems the market might have been too harsh on the dairy company.  Bega’s first-half normalised EBITDA of $70 million exceeded the $64 million forecast by the street.

We see scope for BGA to reach $7.42 a share and find the stock attractive at the current price, based on 20X earnings.

Our ALGO engine triggered a buy signal in BGA at $6.81 on January 16th. BGA will go ex-dividend tomorrow paying 5.5 cents per share, fully franked.

Bega Cheese