Blip, Bump or Block for Bellamy's?

Market darling Bellamy's has fallen 35% this morning. It joins a growing list of priced-to-perfection growth stocks that have disappointed investors late in 2016 (APN Outdoor, TPG, Vocus etc etc). It still trades at 20 times last year's earnings. That's a multiple that implies growth, and management is suggesting that this year is going to show a decline. Is this a great chance to buy a growing business suffering a temporary setback? Or was last year the best we will ever see for this company? I don't know. Chinese consumers are notoriously fickle. But Bellamy's clearly has an excellent brand. It could easily go either way. What today's fall does clearly show, though, is the danger of buying a narrative. Our brains are wired to love a story, but in the stock market great stories can be very expensive. Back in March I wrote a piece explaining "Why Coal Could be a Better Bet than Baby Food". It's worth another read in light of today's falls (VIEW LINK)

Forager Funds 


Founder & Chief Investment Officer
Forager

Steve began Forager Funds in 2009, and now manages approximately $470m across two funds. Offering a listed Australian Shares Fund (FOR) and an unlisted International Shares Fund, Steve focuses on long-term investing in undervalued companies.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.