Why Bellamy’s Australia Ltd Shares Soared Today

What Happened to Bellamy’s Share Price?

Shares of Bellamy’s Australia Ltd [ASX:BAL] gained more than 7.4% today as the shares rebounded from a recent slump.

Why did BAL Shares Jump Today?

The BAL stock price had fallen 75% from a near record high last August after the company failed to adapt to a changed outlook for milk products into China.

Now, with the price so low, trading at a level it hadn’t seen since mid-2015, investors could be charging back into the stock to buy what they perceive to be ‘good value’.

Furthermore, a boardroom battle is brewing, with Tasmanian entrepreneur and the founder of Kathmandu outdoor retail store, Jan Cameron is leading a group to force change at the board level. This could result in a rush of buying activity in an effort to shore up votes before the extraordinary general meeting (EGM) on 28 February.

What now for Bellamy’s Australia Ltd?

The Bellamy’s stock price has fallen 75% in a little under six months. It’s down 63% since early December. But, in the past few days, the stock price had rebounded by 22%. The question for investors now is whether this is a great opportunity to buy a profitable company at a bargain price, or whether the past few days’ price action is just a ‘dead cat bounce’, with a share price fall soon set to resume.

Regards,

Kris

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Kris Sayce, dubbed the ‘Jeremy Clarkson of Australian finance’, began as a London finance broker specialising in small-cap stock analysis on London’s Alternative Investment Market (AIM). Kris then spent several years at one of Australia's leading wealth management firms. A fully accredited advisor in shares, options, warrants and foreign-exchange investments, Kris was instrumental in helping to establish the Australian version of the Markets and Money e-newsletter in 2005. He is the Publisher, Investment Director and Editor in Chief of Australia's most outspoken financial news service, Markets & Money.


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