Earlier this week leading natural health company, Blackmores Limited (ASX: BKL), confirmed strong growth in its third quarter and said it anticipates building on its impressive growth.
In an announcement to the ASX, Blackmores CEO Christine Holgate said, "Group sales for the third quarter are expected to close around 10% higher than the previous quarter of this financial year."
"The Board estimates that this pleasing growth will deliver a third quarter net profit after tax increase of around 20% on Quarter 2 of this financial year (FY15)," Ms Holgate said.
Blackmores recently posted a 22% jump in revenues and 54% increase in profit for the half year to 31 December 2014. Its net debt position also fell to $36.7 million, from $54.7 million, and the board resolved to declare an interim dividend of 68 cents per share, up 55%.
Should you buy Blackmores shares?
In early trade today, Blackmore's shares soared 11% following the announcement. Whilst analysts had previously forecasted strong profit growth over the next three years, clearly the company continues to surpass expectations.
However, although the opportunities for Blackmores throughout Asia (particularly China) are promising, investors must be willing to pay over 36x last year's earnings/profit per share (or 25x forecast earnings per share) to take part in the anticipated future growth.
Personally, I'd prefer to wait for a meaningful pullback in price before hitting the buy button.
