The Motley Fool

Here’s why the Blackmores share price tumbled 15% today

The Blackmores Limited (ASX: BKL) share price tumbled 15% to $70.90 after the vitamins retailer reported another disappointing quarter of China sales.

For the full year ending June 30, 2019 Blackmores posted a net profit of $53 million on revenue of $610 million. This is down 24% and up 1% respectively, with the group blaming the soft result on changes to Chinese e-commerce laws and other distribution channels to Chinese consumers. 

The group will pay a final dividend of 70 cents per share to take full year dividends to $2.20 per share on earnings of $3.09 per share. At $70.90 this places the stock on a yield of 3.1% with a 23x price to FY19’s earnings multiple.

Australia and New Zealand makes up around 45% of its sales and is a saturated market unlikely to deliver strong growth, while sales in the great growth hope of China are also now falling for uncertain reasons. The one bright spot is sales in Asia (ex-China), up 30% to $107 million. 

Blackmores shares are still not conventionally cheap given its price-to-earnings multiple that is normally sported by companies growing profits to some extent. As such it seems today’s buyers are betting on profit growth in FY 2020 and beyond. This is quite possible especially if it sorts out its China problems, but if not the stock could have plenty more downside. 

Another stock selling into China today that reported a much better result today is Treasury Wine Estates Ltd (ASX: TWE). It also offers investors exposure to the growth of the Asian middle class. 

One ASX Stock For An Estimated $US22 Billion Marijuana Market

A little-known ASX company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

And make no mistake – it is coming. To the tune of an estimated $US22 billion.

Cannabis legalisation is sweeping over North America, and full legalisation arrived in Canada in October 2018.

Here's the best part: we think there's one ASX stock that's uniquely positioned to profit immensely from this explosive new industry... taking savvy investors along for what could be one heck of a ride.

AND, this is the first time The Motley Fool Australia has EVER put a BUY recommendation on a marijuana stock.

Simply click below to learn more on how you can profit from the coming cannabis boom.

Click here to find out more


Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited and Treasury Wine Estates Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.