Fund Manager Summary
The fund managers believe that Bega Cheese Ltd presents a promising investment opportunity as signs indicate a potential bottoming out of the decline in milk supply and a reduction in competition within the industry. In their opinion, the recent improvements in export prices could serve as a significant inflection point for the company, particularly following their 1H24 results which exceeded market expectations despite challenges in bulk revenue due to weak commodity prices. The managers note that while the share price has been relatively flat, the overall value of the business is underpinned by a strong branded portfolio and improved earnings, making it an attractive option for investors seeking growth in a recovering market.
Source: Trading View
Commentary From The Managers
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Antares Capital
31 Oct 2025
$5.31
Summary
- Antares Capital sold their investment in Bega.
- Drought conditions in south western Victoria were a significant factor in the decision.
- The fund manager identified a better near-term opportunity in A2 Milk.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Antares Capital
31 Oct 2025
$5.31
- Antares Capital sold their investment in Bega.
- Drought conditions in south western Victoria were a significant factor in the decision.
- The fund manager identified a better near-term opportunity in A2 Milk.
Summary
Antares Capital
30 June 2025
$5.46
- Antares Capital added Bega Cheese Ltd (BGA) to the portfolio in April.
- Positive outlook on Strategy 28, focusing on growing branded businesses like Farmers Union, Tatura, and Vegemite.
- Strategy aims to enhance gross margins while improving asset efficiency to lower production costs.
- Current BGA valuation does not reflect expected earnings growth.
- BGA is well-positioned to acquire Fontera’s Australian food assets, with existing agreements complicating potential bids from others.
- Antares Capital sees this as an option value alongside potential earnings uplift from Strategy 28.
Summary
Spheria Asset Management
31 Mar 2024
$4.16
- Bega Cheese (BGA.ASX) share price was largely flat over the month, underperforming a strong market.
- The company reported 1H24 results in February, showing branded revenue growth offset by weakness in bulk due to low commodity prices.
- There was a late improvement in milk supply, enabling Bega Cheese to exceed market expectations.
- The decline in Australian milk supply in recent years has pressured processors to prioritize market share over industry returns.
- Management indicates potential bottoming out of milk supply decline and easing competition, presenting a key inflection point for the industry.
- Recent improvements in export prices could further benefit the market.
- Despite a stock re-rating in the past six months, improved earnings support Bega Cheese's value outlook.
- Spheria Asset Management continues to hold due to the strong branded portfolio and underlying value of the business.
Summary
Spheria Asset Management
30 Sept 2023
$2.49
- Bega (BGA.ASX) share price fell 16% in September following a weak result in August.
- Spheria Asset Management acknowledges ongoing issues impacting Bega and the dairy industry, including labour supply shortages and inflationary pressures.
- Export prices for milk powders and cheeses have declined, affecting the commodity side of the business.
- Spheria believes these challenges are cyclical and expects a recovery, with some recent signs of pricing improvement.
- The company is shifting from a bulk dairy focus to a predominantly branded model, with 85% of sales having pricing power.
- Future cost reductions and improved export prices are anticipated to enhance the business outlook.
- A reduction in industry milk processing capacity is happening, supported by Saputo's rationalisation of its manufacturing footprint in Australia.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"While Bega Cheese's recent performance may seem lackluster, signs of a potential turnaround in milk supply and strengthening export prices could signal a pivotal moment for the industry. The re-rating reflects a promising future for a brand that appears to be gaining traction amidst challenges."
Last Updated: 31 Oct 2025
Query The Data
Frequently Asked Questions
Who is investing in Bega Cheese Ltd (ASX:BGA)?
Fund managers including Spheria Asset Management and Antares Capital have invested in Bega Cheese Ltd (ASX:BGA).
Why do fund managers invest in Bega Cheese Ltd?
Fund managers are investing in Bega Cheese Ltd due to its resilient performance amid challenging market conditions, with recent results exceeding expectations despite weak commodity prices. There are signs of stabilization in milk supply, which could enhance profitability as competition lessens. The company's strong branded portfolio and improved earnings further support its value proposition, making it an attractive investment.
What happened to Bega Cheese Ltd (ASX:BGA)?
There have been no recent updates from fund managers regarding Bega Cheese Ltd although fund managers including Spheria Asset Management and Antares Capital have previously commented.