Pinned straw:
I’m on my honeymoon. So I will have to be quick. But this is a Massive sell down.
business is going through a bunch of structural changes. But when they have all the warehousing built and the systems working it will a much more efficient business.
they can’t seem to find a CEO. And many changes at board level.
also experiencing the post Covid pull back.
and affected by consumer spend dropping.
so what price seems reasonable?
@Parko5 ... too much information!
I don't have an up to date view on $BAP, as I stopped following them closely about 9 months ago.
However, I've put some quick peer comparisons below. (I know $IPG isn't a sector peer, but it is a distributor I've recently initiated a position in, so it was in my table)
So, $4.40 looks overdone. $BAP isn't as high quality as $SNL, but from a margin perspective its stronger than $MXI and more material with better earnings stability.
So, I guess the issue is the long term outlook. $BAP has historically traded on an average P/E around 20 or so over the last 5 years, and higher in is high growth phase under Daryl.
However, its EPS growth has fallen off from historical levels. The CEO non-starter (as opposed to a new starter) and trading update are a quick double-blow.
So, as ever, it comes down to your view of the future: if you think they can get back to a reasonable even if not stellar growth trajectory, then 11.2 is cheap. But if you think they are structurally impaired in a competitive industry, then pick a number.
I don't have my own view on this.
