Wattle Health Australia Limited

Financial Position Strengthened Because of Capital Raisings: Wattle Health Australia Limited (ASX: WHA) has managed to sign an agreement with Blend and Pack Pty Limited in the month of July 2017. The agreement revolved around the acquisition of equity interest of 5%. Additionally, in the month of June 2018, WHA managed to raise the funds in regard to the ODFA transaction. With respect to this, the company raised $53 million via equity while it decided to take the loan facility amounting to $20 million.

WHA’s statement of profit or loss and other comprehensive income (Source: Company Reports)

The company encountered a rise in the net assets to A$61,539,000 in FY 2018 representing a rise on the YoY basis as in FY 2017 it was A$6,980,000. The net assets as well as working capital of Wattle Health Australia Limited witnessed the positive momentum mainly because of the initiatives or activities which were focused towards capital raising.

What Management Plans to Do Moving Ahead: The management of Wattle Health Australia Limited is having a favourable outlook for the company as they stated that they would be working various initiatives in the upcoming years. The management also stated that they are having a favourable outlook towards Chinese and Indian markets. The company also plans to tap opportunities which are related to its products’ sales with respect to overseas as well as domestic markets.

The management is optimistic about the agreement with the Vasudevan and Sons Exim Private Limited which is in India. Wattle Health Australia Limited stated that, as a result of this agreement, it would be able establish the footprint in India. Also, in the upcoming years, the agreement would also support to witness robust momentum in the sales growth.    

Stock Analysis from Technical Perspective: On the daily chart of Wattle Health Australia Limited, Moving Average Convergence Divergence or MACD has been applied by considering the default values. As per the observation, the MACD line might cross the signal line. The crossover has not occurred yet. If the crossover occurs, the stock price might move upwards representing a bullish momentum. As a result, we maintain our “Speculative Buy” rating on the stock at the current market price of A$0.920 per share.
 

Bellamy's Australia Limited

What Factors Supported BAL in FY 2018: The management of Bellamy’s Australia Limited (ASX: BAL) stated that the company witnessed robust growth momentum in the profitability, revenues as well as cashflows in FY 2018. The management of the company stated that there have been competitive pressures with respect to the Australian business lately which might impact the growth in the sales in FY 2019.


BAL’s Financial Overview (Source: Company Reports)

Let us now have a look at the company’s important metrics. BAL managed to generate revenues amounting to $328.7 million in FY 2018 while in FY 2017 the revenues were $240.2 million. On the other hand, the company’s EBITDA as well as NPAT amounted to $64.6 million and $42.8 million, respectively. The robust momentum in the company’s revenues was mainly supported by the volumes and it also consist $8.7 million which was because of Camperdown and was generated from the external sources.

What Investors Need to Watch Out: The management of BAL stated that in FY 2019 the growth in the revenues, with respect to the Australian label, would be in the range of 0-10% and that too towards the lower end. However, the management also stated that in H2 2019, the company might saw robust performance because of the important revenue initiatives as well as normalized trading conditions.

Stock Analysis from Technical Perspective: A technical indicator, Moving Average Convergence Divergence or MACD, is applied on Bellamy’s Australia Limited’s daily chart. The default values have been considered for the purposes. As per the observation, the MACD line has crossed the signal line. However, after the crossover, the MACD line has been moving parallel to the signal line. Therefore, it would not be feasible to take any position at the current juncture. Hence, the market players need to closely watch the stock at the current market price of A$7.320 per share.   
 
 

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