Bellamy’s Australia Ltd (ASX: BAL)

Bellamy’s Australia Ltd (ASX: BAL) witnessed a stock price surge of 5.3% on March 19, 2018. This seems to be coming at the back of addition of the stock in the S&P/ASX 200 as per the latest S&P/ ASX indices March quarter rebalance. The stock can now be an investment target by many fund managers. Primarily, its turnaround strategy seems to be paying well while underlying health of the business is regaining strength. BAL has been tracking well in controlling its operating costs and has even upgraded full year revenue and EBITDA margin guidance for the core business to 30-35% and 20-23%, respectively, excluding Camperdown. The Company additionally continued its focus on reducing lead times. We have a hold on the stock at the current price.
 

Beadell Resources Ltd (ASX: BDR)

On the other hand, Beadell Resources Ltd (ASX: BDR) witnessed a share price fall of 16.8% as investors seem to have been distressed by the group’s announcement on its plans to merge with Canada’s Golden Harp. The new merged entity, will be known as Americano Mining Inc., and will be listed on both the ASX and the TSX Venture exchange. The group believes that a Canadian listing is important for the company as the TMX (including the Toronto Stock Exchange and the TSXV) is considered a global leader for mining companies. Under the scheme of arrangement, Golden Harp will undertake a private placement of common shares and the placement will raise approximately CAD$4 million. Beadell shareholders, via a Scheme of Arrangement, will exchange 14.25 fully paid ordinary Beadell shares for one post consolidation Golden Harp common share (either in the form of CHESS Depositary Interests (CDIs) or, if a shareholder elects, Golden Harp common shares) such that at the completion of the proposed merger existing Beadell shareholders will hold approximately 94.5% of the issued capital of Golden Harp. The whole move banks on BDR’s Tucano mine that is said to be listed in Canada along with the vast majority of South American gold developers and producers. The group’s board unanimously recommended that Beadell shareholders vote in favour of the merger, in the absence of a superior proposal. Beadell intends to implement the merger in the second quarter of calendar year 2018. It might be better to wait for any further developments in the above regard.

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