Cochlear Limited

COH Details

Acquisition of Sycle LLC: Cochlear Limited (ASX: COH), the world leader in implantable hearing solutions, acquired 100% of the shares of Sycle LLC (Sycle), the world’s largest provider of audiology practice management software. Sycle software is used by over 7,000 clinics, with over 20,000 hearing professionals in the US, UK and Canada. In the US, the company’s biggest market, Sycle has an estimated 70% market share. Sycle is a cloud-based practice management solution valued for its simplicity and ease of use as it seamlessly integrates many services including patient clinical data, financing, reimbursement and marketing campaigns, allowing hearing professionals to spend more time with their patients and less time on administrative overhead. Importantly, the acquisition of Sycle is a strategic investment that will strengthen Cochlear’s service offering to its clinical partners. Sycle offers a market-leading practice management solution with a product suite that can be expanded to provide a solution for cochlear implant clinics. This acquisition will enable its partners to enhance clinic efficiency, freeing up more time to deliver patient care. Moreover, there is an opportunity to leverage best practice processes and systems across the hearing services industry, and streamline patient care. Sycle provides a single platform from which it can build awareness of the hearing loss treatment options available as patients are managed through the continuum of care.

The stock has moved up 29.8% over the past six months (as on June 21, 2017), led by solid result for H1FY17, and currently trading at its all-time elevated levels. Although, the outlook is optimistic for FY17, we believe that is incorporated in the current price and give an “Expensive” rating on the stock at the current market price of $159.44


COH Daily chart; (Source: Thomson Reuters) 

Bega Cheese Ltd

BGA Details

On 8^th June-2017, Bega Cheese Ltd has announced an opening price of $5.50 per kg milk solids for its Victorian milk supply. The price is a 10% increase on last year’s opening price and reflects global market improvements in the dairy sector. Company believes as it was important to deliver a positive price signal to farmers a very tumultuous period for the industry. The price reflects improvements in the market while being appropriately conservative given the volatility that has been experienced in global supply and demand in recent years. Further, Bega Cheese continues to grow its dairy offering in cheddar, mozzarella, processed cheese, cream cheese and nutritional milk powders.The company expects that its opening price will give confidence to its existing suppliers, attract new suppliers and improve the returns the company receives from dairy ingredients.
 
Sale of spray dryers at Tatura and its infant formula finishing plant at Derrimut:  Recently, Bega Cheese Limited has completed the sale of one of its spray dryers at Tatura and infant formula finishing plant at Derrimut to Mead Johnson Nutrition (Australia) Pty Ltd. In order, Bega Cheese received A$180 million on completion and will receive the A$20 million balance of the purchase price on or before 31 December 2017. Funds received from the transaction will significantly reduce the bank funding required to fund the Mondelez acquisition. Further, the completion of the acquisition of Mondelez’s Australian and New Zealand grocery business, including Vegemite is expected to occur on or around 30 June 2017.  The stock has moved up 51.0% over the past six months (as on June 21, 2017), led by robust results for H1FY17, and currently trading at high levels. We give an “Expensive” recommendation on the stock at the current market price of $5.92


BGA Daily chart; (Source: Thomson Reuters)

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