During this period of heightened market volatility, the divergence between expensive and cheap stocks has continued to grow. Perpetual Investments Head of Equities Paul Skamvougeras discusses where he sees opportunities.
A sharp rise in exports as well as better sales of two key consumer products bought or developed in the last year or so have enabled Bega Cheese to offset the ravages of the drought on its core dairy business.
Bega Cheese is the latest business to issue a profit warning regarding its 2020 earnings, saying its performance would be affected by what it called “unprecedented” competition among processors for milk and softer demand for exports.
As dry conditions continue and farming costs increase, Australia's milk supply is expected to decline again in FY20. Dairy Australia forecasts Australian milk supply to contract a further -3-5% in FY20 after declining by -7-9% in FY19.