BWX Enters the US and Share Price Climbs 4.5%

This morning, skincare company BWX Ltd [ASX:BWX] climbed 4.5% to a high of $6.16 per share.

The climb just adds to the stock’s already tremendous climb of 52% year-to-date.

Why the climb in BWX Share Price?

This morning, BWX announced they were heading to the US. The skincare company acquired Mineral Fusion National Brands for US$38.4 million in cash.

BWX CEO, John Humble said:

We are delighted to announce the completion of the Mineral Fusion acquisition.

With our Sukin brand continuing to grow strongly, both domestically and internationally, the Mineral Fusion brand of natural cosmetics will provide opportunities to expand the Sukin product range and to leverage Mineral Fusion’s already established distribution infrastructure for the distribution of Sukin in the US to all the key retail groups in the natural sector and pharmacy channel.

It’s great for BWX as they will now attempt to expand their Sukin and Mineral Fusion’s brands internationally.

Mineral Fusion is the number one natural consumer brand in the US. Almost 80% of their 2016 sales came from cosmetics and skincare products. Online growth for their products is also an amazing 49.9% compounded annually.

What now for BWX?

Should you buy BWX now, or have they already climbed too high?

The stock is trading at a whopping 43-times earnings. It just goes to show what investors expect in the long-term.

Asia will be a huge growth driver for skincare companies like BWX. The continent accounts for potentially 3 billion consumers — a market worth hundreds of billions of dollars.

Who’s to say BWX will capture enough of that market to justify their valuation? Well, they have the quality Australian brand going for them. And they’ve got products which already sell to Asian consumers.

It really comes down to one question. Do you think growth will materialise for BWX?


Härje Ronngard,

Junior Analyst, Money Morning

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