Question 1: What are your thoughts on Bubs Australia (BUB) and its potential for long term growth?
Answer: I think the market has lost faith in goat milk formula company Bubs Australia (BUB), which explains in part why the share price is languishing near record lows. At the AGM, the company said that 1H23 revenue would be little changed on 1H22 (with additional costs), before seeing strong growth in 2H23. It will, however, still lose money in FY23.
Only 1 major broker still covers the stock and that is Citi. Their target price is $0.32, the same as the current ASX price. Commenting on their recent downgrade to ‘neutral’ from ‘buy’, Citi said:
“While remaining supportive of Bubs Australia’s journey to become a more diversified and sustainable business, and despite recent momentum improvement in key markets, Citi has downgraded on the stock following a weaker than anticipated first half.
The broker attributed first half performance to slower-than-expected US consumer offtake and a new model in China. The broker lowers its full year net profit forecast to -$8.3m from $2.7m, factoring in first half performance as well as expected increased costs.”
There is no doubt potential for long term growth………but it is hard to see the market leaping to re-rate the company.
Question 2: I would like to sell Woodside (WDS) shares gained as an in specie dividend from BHP on 1/6/22. For capital gain calculations, what is the cost price and what is the purchase date? If the purchase date goes back to the purchase date of the BHP shares, I have some BHP shares bought well over 12 months ago and some bought less than 12 months ago.
Answer: You received 1 Woodside share for every 5.534 BHP shares owned. According to ATO Class ruling 2022/60 (which you can access from BHP’s website or the ATO), the acquisition (cost) price for your new Woodside shares is $29.76 each. The acquisition date is 1/6/22.
This means that if you want to access the CGT discount, the earliest date you could sell them is 1/6/23.
Question 3: What is the dividend yield of the ‘top 20’ ASX stocks?
Answer: The current dividend yield on the ‘top 20 stocks’ on a market cap weighted basis is around 5.8% pa. Dividends from BHP, Rio, Fortescue and Woodside are at record levels due to buoyant iron ore and oil prices, and these are boosting the overall total.
It is not expected to remain at this level. On a forecast basis for FY23, the dividend yield is closer to 5.0%.
Question 4: Can you advise me of a good program to prepare my trades and dividends records for my accountant?
Answer: Sharesight is one (www.sharesight.com/au/ ). Normally, I would recommend a “second” as well but it is not an area I keep close attention to. Perhaps our subscribers can help. If there are any suggestions, please let me know and I will pass on.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
