Is There a ‘Value Trap’ with Vita Group?

Hi Expert,

I have recently purchased VTG for $1.64. (By my calculations I was buying VTG at a discount to its IV.) The price for VTG has dropped to $1.175.

My question is: have I been the victim of a “value trap”? (VTG has recently purchased a new business but I thought VTG business fundamentals has not changed).

Regards

 

A: Probably. Like any model, intrinsic value has its flaws.

The only broker (Morgans) who covers Vita Group (ASX Code VTG) has a target price of $1.54 on the stock, but a hold rating.

Like him, I am struggling to understand the strategic rationale for the Clear Complexions acquisition.

regards


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