CDA - Codan Limited

[finicky]

I dare not speak (almost).
I'm holding my breath and also my cash.
My take is that the daily looks a hope with a tiny higher dip and peak and now outside the recent downtrend. Today caught my interest with no change in the closing price on firm volume. Could that mean some stealthy accumulation. Undecided myself.
The monthly shows nothing to take heart from at all imo.

Held
Hold

Monthly

 

[finicky]

Miniscule volume at noon today but CDA underperforming market. Gap has filled; next week should be testing. I'm undecided as to whether it's the pause that refreshes with controlled looking buying/selling last few days or if it's keeling over. Anyway galumay has the opportunity to sell @ 5.88 for about breakeven after costs if he feels this thread has distracted him.

$5.68 3508

Daily

 

[Garpal Gumnut]

Miniscule volume at noon today but CDA underperforming market. Gap has filled; next week should be testing. I'm undecided as to whether it's the pause that refreshes with controlled looking buying/selling last few days or if it's keeling over. Anyway galumay has the opportunity to sell @ 5.88 for about breakeven after costs if he feels this thread has distracted him.


Daily
View attachment 147789

Yes there is lotsa red there.

I might have a poke at it if it cracks a higher high next week.

Emphasis on “might”.

gg

 

[finicky]

Geez, some really cautious b☆stards around here.

 

[galumay]

Anyway galumay has the opportunity to sell @ 5.88 for about breakeven after costs if he feels this thread has distracted him.

LOL! I hope to never sell, my hodling period is forever whenever possible. No distraction for me.

 

[finicky]

Bid in today for 500 CDA @ 5.03 - must be at the top of the queue by now.
There are two forces at work here: the smart money and the dumb money, and I think it's pretty clear on which side of the fence I stand

 

[galumay]

No doubt in my mind, @finicky.

 

[frugal.rock]

If detector sales are around 60% of their income, I'd be a little worried.
Gold price cycle plus inflation plus impending doom recession from the depths of depression sort of implies detector sales will be critical moving forward. Great company though.
Dr Bruce Candy is a legend. Is he still in Minelab?

 

[frugal.rock]

History : HALCRO

The world's only Super-Fidelity amplifiers

halcro.com

"In 2008 Minelab was acquired by Codan, a large military communications company, because of the synergistic fit with their mine detection capability. Codan had no interest in Halcro so the company was retained by the original shareholders and shelved. This was in part due to the fact that what Codan were really buying was Bruce Candy’s genius and Halcro was seen as a distraction for his time.

Halcro briefly licensed their products to be manufactured by Vivid Audio but unfortunately this came to an end with the onset of the Global Financial Crisis. So the Halcro assets were mothballed and left in storage."

Halcrow sounds like a product that should/ could be in everyone's TV, phone, amplifier... anything that makes sound to listen to.
Meanwhile CDA price just gets "even cheaper". ?

 

[Dona Ferentes]

CDA hammered - down 12%. AGM time and perhaps Outlook not favourable?

 

[MannyTheMemmoth]

******* cheaters, they dumped their stock and held onto bad news for 2 months after their annual result.

 

[MannyTheMemmoth]

It will be down 20% by end of the day, may be sub 3 in few weeks.

 

[Dona Ferentes]

 

[mullokintyre]

The Chairmans address says that Africa is the problem area.
Sales well down in Africa, with FY23 not looking much better.
The growth is coming from the Comms side of the business, now up to 30% of total revenue, and expected to get a little bigger.
Sales up due to acquisitions, NPAt up3%, EBITDA up 2%.
The problem is the cash generation
Still negative cash flow which they forecast to improve to a positive rate in the second half of the fin year.
Will wait until I am sure that it has bottomed out before piling in.
Mick

 

[galumay]

An opportunity to pick some more up for me, my conservative valuation already allowed for the telegraphed and expected difficulties in Africa. I suspect it will get even cheaper in the short term so no rush to accumulate. Market is now pricing it like 2019 when NPAT was about $45m, given they are guiding for somewhere over $50m I think that misjudges the company somewhat. No doubt though, the continued negative FCF will have spooked those with shorter term horizons.

I guess it helps to have been through a similar series of issues 10 years ago with CDA, they got as low as 60c then before the steady run up to $18, its not like its a business under financial stress.

 

[mullokintyre]

AS long as they can fix the cash flow issue, things should be ok.
Happy to buy in at lower prices for the long term.
Mick

 

[finicky]

I'm absolutely sure we had all the information at our fingertips that the recent sellers did.

 

[mullokintyre]

I'm absolutely sure we had all the information at our fingertips that the recent sellers did.

My problem is my arms seem longer these days and my sight is getting poorer.
Don't always see those little things at the ends of my fingers.
mick

 

[finicky]

If trusting in today's guidance, based on the predicted FY23 alone and usIng the lower end of estimated NPAT then CDA is worth a minimum of $4. This assumes no recovery to earlier levels of profitability and conservative calcs e.g I have used only a 2x multiple of FY22 book value for an assumed 12% ROE in FY23.
As suggested by galumay I have used FY19 NPAT for comparison where NPAT was $47m and ROE was 21% but BV was only 1.18 in FY19 whereas it was 2.03 in FY22 so this reduces expected ROE by factor of 0.58
Again conservative if going by guidance as that would optimitically suggest something higher than $50m NPAT for FY23.

 

[finicky]

We were told before about end of Covid restrictions affecting Minelab sales in Africa and political turmoil but I don't think we were told that in Sudan, our biggest source of customers, the army coup leaders are stealing the artisans' mining fields.