Ring that Bell? Week Ending 14th June 2019

Welcome to my Friday email where I talk about all things stock market, agri and life.

Is it time to ring the bell on the market here..??

A number of big cap, high PE stocks have recently done management selldowns at very lofty prices.

Take payments business APT. Afterpay Touch Corp Ltd this week did a capital raising and management selldown @ $23 a share. Remember this company has a market cap of over $5BN and no "E" in the PE....the founders both sold $47m worth of shares each @ $23.00 a share, then a day later AUSTRAC turned up and said then need to check up on their anti money laundering policies....ooops...!! The stock traded below $21.50 today.

We look at a lot of listed companies all the time and sometimes things just don't look right. Take BFC for example. Beston Global foods is a small food company based in Adelaide with some small dairy processing assets making Mozzarella and normal cheese, plus some milk. I couldn't work out why it seemed to be underperforming in a share price sense until I spotted the note on page 33 of their annual report. The Chairman has a management agreement based upon the Group's portfolio value. The company has a current market cap of $49m and the Chairman paid himself $2.4M in the FY17/18. Say's it all doesn't it..?? And it doesn't look right.

One market opportunity that could be developing is ELD. Their PE is sub 12 and despite the drought the business is performing well, plus their share price has pulled back to below $6.

Also on agri merchandise businesses, the ACCC has said they need to look harder at the Landmark/RHL merger deal, citing a concentration of sites in some areas that may disadvantage farmers. Looks like the deal is a way off from being settled.

On sport, what a great win by Ash Barty in the French Open tennis. no fanfare, no whinging just quality tennis... and great publicity for Vegemite, who are one of her sponsors. Amazing that according to Wikipedia her career earnings are now more than US$10m.