The case For ?, or Against, BGS .....
Had a look at the last 3 Annuals of BGS ...
Top line grew by ~20% from 2016 to 2017, but grew by only ~3% from 2017 to 2018
In 2017 BGS had a tax credit of ~69.4m. If it didn't have that, and based on its latest tax rate of ~22%, it would have paid about ~33m in tax giving it a Net Income of ~115m. A bottom line increase of ~6% and not (217.4-109.4)/109.4 = ~98%. It didn't seem to be entitled to a tax credit in 2016 or 2018.
In 2018 it sold a major asset for ~176.4m. If it didn't its Op. Income would have been ~163m and therefore its Income before Tax ~46m. Its tax deduction, based on that 22% tax rate, would have been ~10m giving it a Net Income of ~36m. Resulting in a -83% fall in its Bottom Line compared to 2017.
If we look at what "the Market" thought of all this, we see ....
So since early 2019 its share price has been in a general down trend. And not long after it issued its 10K in late Feb, 2019 there was an ~19% Fall in its price to about $22/sh.
Since then BGS's price has moved sideways and recently saw another major sell off on very high volume traded.
So one wonders where is the Investing Value in BGS ? ...... Well, I suppose there could be those who will assume that things can't get much worse in terms of its share price so, surely, buying at "a Support" of about $22 must show some upward gain ....
....... but the current Fundamentals don't look that hot, especially if its Top Line keeps showing a minimal increase and it doesn't have any more "Assets" to sell, because (36/1700)x100 is a Net Income/Net Sales of only 2% and doesn't leave much "Margin For Error".
I suppose time will tell ......... |
