Bellamy’s Australia Ltd Leveraging subdued stock levels
Leveraging subdued stock levels: Bellamy’s Australia Ltd (ASX: BAL) stock rallied over 4.96% on January 31, 2017 leading to a rally of about 10% in the last five days alone. Investors might be leveraging the subdued stock levels. Given the brand value that Bellamy’s has, looks like investors are accumulating the stock. Higher than expected inventory stock levels due to rising competition in China for FY17 had impacted the stock sentiment. But, BAL is making efforts to decrease its costs and volumes. The group is trying to amend their long term strategic manufacturing arrangement with Fonterra. Both the groups are trying to extend their five-year term by a further three years to apportion minimum volume commitments over a longer period. Moreover, BAL undertook several initiatives to reduce their cost base while enhance their supply chain.
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