Bega Cheese – what are Roger Montgomery’s thoughts?
Floating a business in volatile times takes a big leap of faith. Bega Cheese (ASX:BGA) floated last month; issuing 127 million shares at $2 each, this raised $35 million which brought the companies value to $250million. In this interview with Ross Greenwood, Roger Montgomery shares his Value.able expert opinion on the future of Bega Cheese. Listen to Podcast.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
jeff mcinnis
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Bega certainly do have an international footprint. I regularly buy Bega cheese at my local Carrefour (French) supermarket in Riyadh, Saudi.
Duncan
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But there’s a good measure of currency impact there too.
Bega is in Carrefour (& Waitrose) in Dubai too, but I buy the english & irish cheddars. Its better & cheaper than Bega these days.
Roger Montgomery
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Thems fighting words to an Aussie Dairy farmer Duncan!
Alex
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No. Discretionary spending is down, because
1/ the current government in it’s wisdom has decided that people who earn over 100K are “wealthy” and therefore are somehow worthy of extra tax’s in the form of carbon tax, flood “levies”, and increased “tax bracket” creep as they try to work harder and more overtime when they move into a higher tax scale
2/ The same demographic has been hit by higher power, school fees, water and council rates that have been going up twice inflation for the last several years (and which they have no control over)
3/ Building costs have skyrocketed since the GST added a compounding 10% to every labour and (increasing) traddie charge. Consequently all homes (including old stock) have become more unaffordable and finally
4/ We have a Reserve Bank that continues to set an interest rate that is very “restrictive” compared to the rest of the world, due to our so called “two speed economy”… the benefit of which might be seen in increasing Government revenue: but which is NOT passed onto the taxpayer in terms of frugal government spending or tax cuts.
It is the so called “wealthy” middle class that is responsible for pretty much ALL of discretionary spending. If they don’t open their wallets, the country in general, and retailing in particular will remain in recession.
Roger Montgomery
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Thanks for sharing Alex.
David King
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Interesting to hear from Mr Williams about Bega Cheese’s marketing to local stores and abroad, but it seems there wasn’t time for Roger’s thoughts. As an aside, who else stocked up with Bega Exra Tasty Slices last week from Woolies at $2.87 per 250 grams (allegedly half price, but normally about $4.70)? It’s long dated, so I got a fridge full of the stuff for us. It’s Yummo.
By the way a note on the thoughts of Gerry H about retail: Put your hand up if like my wife and I you are buying much the same things but at a much cheaper price? Two loaves of Helga for $5 to $6, Rivers T shirts at $6 instead of Bonds at $20, shoes also from Rivers at $25, 32 inch TV’s at $300 ($1000 2 years ago),
Put the other hand up if you are sick of Gerry’s screaming TV ads. It was almost better when he did them himself, and that’s saying something!
So we’re spending, but paying less. Discretionary spending is down because prices are down. Non-discretionary is up because prices are up. Economics 101.
So, what think you of Bega, Roger?
Andrew
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You sound every bit the value investor David. See a discount and buy lots of it, shame though you can’t also sell it back to woolworths when the price gets back to $4.70.