Blackmores and Vitaco

About the author:

Author name:

By Scott Power

Job title:

Senior Analyst

Date posted:

18 November 2015, 11:38 AM

Sectors Covered:

Healthcare, Life Sciences

What happened

• Overnight US based vitamin companies GNC Holdings (down 6.4%) and Vitamin Shoppe Inc (down 4.9%) shares dropped as the Justice Dept, the FDA and other US agencies intensified their scrutiny of the dietary-supplement industry.
• Manufacturers of nutritional products including USPlabs LLC and SK Laboratories Inc were charged by the US for fraud in the sale and marketing of dietary supplements after conspiring to import ingredients from China and lie about their source.

Our view

• Both Blackmores (BKL) and Vitaco (VIT) do not supply into the US and the events reported overnight are not related in anyway to these companies. Both companies are supplying product into China which is driving strong demand.
• The share price in both stocks have rallied strongly. BKL is currently undertaking a roadshow in China speaking with investors in the region. We would highlight that VIT is more diversified given its sports nutrition and health foods business.

More information

Morgans clients can access our detailed research on all companies we cover in the Healthcare sector. If you are interested in finding out more, please contact your nearest Morgans office.

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