Shares of organic infant formula and baby food company Bellamy’s Australia Ltd [ASX:BAL] have continued to rise in value, with the share price currently trading at $9.57, up 5.40%.
It seems that Morgan Stanley’s belief in the company and its potential to turn around (stated in January) is still helping Bellamy’s growth, as it’s dubbed one of the most undervalued stocks in 2018.
The problem with a stock such as Bellamy’s, is that some investors might feel as though they’ve missed that golden opportunity to invest, but there’s always potential, however.
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Bellamy’s share price close to bullish?
According to Morgan Stanley, the company is edging closer to turning its business around after developing a premium brand. The company also recently launched products which could be a point for future sales and profits. The market has yet to factor in this strong growth potential over the coming years. Investors could be underrating Bellamy’s value.
Which means we could see further gains to Bellamy’s share price in the near future. And this could be why we are seeing a lot of investors flock to buying the company’s shares in the last few weeks of trading.
But, the accreditation required to sell its products in China could take a little while longer, so investors will have to be patient.
While the accreditation will offer huge growth potential for Bellamy’s, it might not be until the end of FY19 before it is actually in place and Bellamy’s is able to sell its products in mainland China.
The registration of Bellamy’s Chinese-label formula at Camperdown remains in progress. The application was put back in December 2017.
Bellamy’s 2019 financial year
You can expect that a company like Bellamy’s will continue with its growth development plans as we head further into this year.
As discussed in an investor presentation announcement, Bellamy’s has established a more sustainable business model in the second half of 2018 when compared to 2017’s second-half results.
One thing to keep in mind is the fierce competition from China’s milk market as the milk market intensifies between global competitors.
However, Bellamy’s is directing more than $500 million in revenue by 2021, with a focus on Chinese and Asian markets.
As always, investors will have to wait and see the outcomes of some of its accreditation and registration applications before we can get a better idea of where Bellamy’s share price will head in 2019.
For Money Morning
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