The Clover (ASX: CLV) share price is currently up 13% after the company gave an update.
What is Clover Corporation?
Clover is a business involved producing the ingredients for infant formula. It describes itself as a global leader in delivery of stable micronutrients to the global infant nutrition and special medical market.
What did Clover announce today?
After the first half result the company has experienced strong demand from customers globally with an increase in forecast demand coming in the fourth quarter from infant formula manufacturers.
Consumers are apparently buying additional products which have depleted the pipeline into distribution warehouses and retail outlets. Clover said this is likely to have been exacerbated by company and isolation activities.
Clover is benefiting from favourable movements in the exchange rate with most of the company’s sales transacted in US dollars.
What next for the Clover share price?
Clover said it’s too early to state the full impact of the market movements and they’re mostly one-off events. Normal demand is expected to return in FY21.
The Clover Board now expects a stronger second half FY20 performance assuming the global situation remains. The Board will consider reinstating the dividend at the end of the financial year.
Higher demand should mean a higher share price. I’d be happy to invest a not-too-large amount into Clover today with its growth continuing. But technology shares could be the best way to go.
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Disclosure: at the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.