Brambles is still not cheap despite the fall

Nicholas Forsyth

Market Matters

Yesterday BXB fell -9.9% after reporting earnings which were basically in-line with recently downgraded guidance but the future looks uncertain, and this is clearly where the market focused. Outgoing Brambles chief executive Tom Gorman said the result was disappointing with most of the problems focused around its US business where the economy is supposed to be strongest. The logistics/pallet company is struggling with the shift in consumer behaviour as on-line shopping, which is creating Goliaths like Amazon, are thriving leading to a surge in small parcels travelling by post, rather than on pallets between shops.

Interestingly only a few years ago, investors thought postal companies were in trouble due to the arrival of email, but now with on-line shopping growing exponentially, they have enjoyed a significant renaissance.

Although BXB has reached our technical buy zone, after correcting ~30% since August, it's hard to imagine investors chasing this stock due to growing uncertainty. BXB is still not cheap and only pays a grossed-up dividend of ~3.4%, so we will be observers, not investors for now.

Livewire readers can receive 14 days’ free access to our Platinum level membership by registering here.

Brambles (BXB) Monthly Chart


2 topics

1 stock mentioned

Nicholas Forsyth
Nicholas Forsyth
Director
Market Matters

Market Matters is an online investment and share trading advisory service designed for those that want to take their wealth further. We specialise in advice for active share market investors, including those new to the markets or those with a Self...

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment