Two stocks that fell on ASX – Bellamy's Australia and Independence Group NL

Bellamy's Australia Ltd

BAL Details
· Expanding penetration: Bellamy's Australia Ltd (ASX: BAL) stock fell over 4.4% on October 10, 2016 partially owing to some market volatility. On the other hand, BAL reported a solid EBIT growth of 342% year on year (yoy) to $54.3 million for FY16 ending concerns over the group’s growth especially in China. EBIT margin more than doubled during the period against prior corresponding period. As a result, NPAT surged 322% to $38.3 million. The strong EBIT performance was driven by continued revenue growth, with revenue up 95% on FY15 to $244.6 million. Having a strong reputation among Chinese parents, the group is further enhancing its penetration in the region via its distribution channels to improve access to China’s consumers. BAL online flagship stores via Tmall.com is among top 10 brands for infant formula while JD.com and VIP.com drove direct sales from Bellamy’s to consumers in China. BAL has also been positive on the regulatory changes and confident over the group’s growth opportunities in China.

· Recommendation: We give a “Hold” recommendation on the stock at the current price of $11.97


BAL’s Performance highlights (Source: Company Reports)

Independence Group NL

IGO Details
· Intention to acquire Windward Resources: Independence Group NL (ASX: IGO) stock fell over 4.97% on October 10, 2016 while the group lodged its Bidder’s Statement with the Australian Securities and Investments Commission, which comes after IGO’s recent announcement about their intention with regard to an off-market takeover offer to acquire all of the ordinary shares of Windward Resources Ltd (ASX: WIN) (Windward) at $0.19 per Windward share. The group has already acquired Windward shares on-market, and now has a voting power of 25.04% at Windward Resources. On the other hand, IGO shares rallied over 55.8% this year to date (as of October 07, 2016).

· Recommendation: We give a “Hold” recommendation on the stock at the current price of $3.82

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