CDA - Codan Limited

[MannyTheMemmoth]

So it is out, minelab unaudited revenue a little lower than guidance, communication revenue a little higher than guidance, net debt is $61m instead of $70m guidance so more or less it's in accordance with their guidance, a little on positive side as lesser debt and revenue came out on higher side of guidance?

 

[finicky]

Just spotted the 20% price jump on ze high volume so early in the day. Yeah baby!
I shall unleash my report later.

 

[finicky]

@MannyTheMemmoth yeah that's pretty much it I guess, but a beat is a beat. Even slight is reassuring when many feared bad news and the 16% higher order book for Comms segment is encouragement for H2?

 

[peter2]

Who says we can't "time" the market. (Occasionally)

Horizontal line on the price chart marks the break-out level. There were early indications of a probable break -out as shown by the relative strength indicator (top pane). This shows that the price of CDA was starting to go up faster than the benchmark market index (XNT). The CDA price bars had turned blue to signal the price has moved significantly higher than the prior low.

A few days after the BO-HR >4.15 there was a high volume bullish bar (HVBB - marked by the blue arrow). This BO coincided with the market also going higher and turning the lower ribbon to green. This ribbon indicates that the overall sentiment of the market is very bullish.

Then today there was a positive trading update. Who would have guessed that was coming?

Note: I've sold half at 5.25 as I normally do after a positive trading update that causes a huge price spike.

ps: I posted about a possible BO-HR as a reversal opportunity in this thread (post #400).

Posted, because it's nice when a plan works out so well.

 

[galumay]

Well done Peter2, as we know playing a different game to me, but thats a good result for your processes.

My regret is that I didn't buy much more agressively based on my strong conviction that a very wide divergence between price & value had opened up. You dont get many opportunities to swing at fat pitches like this and part of the art of investing is having the patience to do nothing for long periods of time and then make big bets when these opportunities present.

The trading update was not really much of a deal, just coming in over the upper end of what had been a disappointing guidance - but I think Mr Market had priced it as if more bad news were expected, so the strong rise in price reflects the realisation the market was wrong about the business.

 

[finicky]

I saw via James Gerrish's 'Match Out' on Livewire that the best performer today was BRG, up 7.5%.
Thought what about CDA? Realised it's apparently not in the ASX 200. So with a rise of 17.8%, on quite strong volume, CDA smashed the ASX 200 today.

 

[MannyTheMemmoth]

9 cents dividend, no guidance provided for next half.

 

[finicky]

9c interim dividend declared ex date 23 Feb.
No fy23 guidance yet but I will assume small improvement in payout H2.
At current share price in the 5.70 area I'll tale a punt on full year payout (9c + H2) being 20c
So current yield on 5.70 share price is vicinity of 3.5% ff.
Unalluring but alright while optimistically waiting for better times I guess.

Held

 

[MannyTheMemmoth]

I have similar thoughts. I think it has seen its bottom at 3.64 ~ 4, now it will stay around the current range. Guidance for next year at the time of full year results will be key event.
Held with 2 year timeline in mind.

 

[finicky]

Chart hasn't fully updated yet but shows the basic picture, which is that CDA appears to have broken recent support. I suggest that lower is the more likely outcome and I will probably be adding if CDA retraces to an interesting level - maybe 4.75 will do me. There's the breakaway gap down at about 4.55 but I've read that breakaway gaps are not expected to fill.

Held

 

[MannyTheMemmoth]

CODAN ACHIEVES 2G ALE JITC COMPLIANCE FOR SENTRY-H 6110-MP RADIO

Ashburn, Virginia, United States, March 27, 2023 (GLOBE NEWSWIRE) -- After comprehensive testing and verification, the Joint Interoperability Test...

www.globenewswire.com

 

[finicky]

So reality upset my chart expectation and CDA closed with a full white candle today; simultaneously breaking 5.75 level resistance, setting a 6 month high and filling the gap made back then (Oct)
The break of 5.25 support a month ago roughly conforms to a 'spring' pattern where following an uptrend the price breaks down from a sideways consolidation but rapidly reverses to re-enter to the range. Supposed to be a bullish set-up for a trader. Chart looks positive now but I have lower confidence due to sparse volume being reflected by the poor momentum indicators. I'll pick upwards as the more likely path but I'm not adding.

Held

Pattern Recognition: Trading Springs

Trading Springs is one of the most profitable trades is in the opposite direction to a failed breakout off a sideways consolidation or accumulation area.

www.thechartist.com.au

Daily

 

[MannyTheMemmoth]

Is any news coming out, so much movement at good volume 20 mins in the session ?

 

[frugal.rock]

It's probably about the price of gold, Manny.
High gold prices translate to higher detector sales out of Minelab, eventually. Now if they went mainstream promoting gold detectors.... ? good sales but detecting areas would be ripped to shreds very quickly and shut down by EPA's and grubberments.

 

[finicky]

@MannyTheMemmoth my view is that the break of resistance at 5.75 is confirmed. Previously sellers overcame buyers at that level. Potential buyers might have waited to see which way the sideways movement ('range') would resove before committing themselves, 'buying begets buying'. Maybe momentum traders are noticing. Or maybe the sellers have exhausted their supply, 'selling dried up'. It's notional, but when this stuff goes on you don't need impending news - although could be I guess. I feel optimistic but where's the volume?

 

[finicky]

Looking at the monthly chart, it strikes me as not a worry for holders yet. But it seems poised to go one way or the other. High level consolidation so far. Momentum indicators verging on crossing positive. I'm inclined to pick higher as the more likely direction.
However going by H1 result and guessing at:

• around $65m NPAT for FY23 (H1 was $31m)
• Book Value FY23 of 2.35 (guess)
• 182m shares on issue

I estimate Codan's value at about $7. That's just on FY23 performance guesstimate and attributing nothing for optimism about growth or past performance.

Held and holding (but I seldom trade anything)

MONTHLY

 

[peter2]

The demand for CDA has been reasonably strong off the lows. The few pauses in upward price momentum have been sideways not down (indicating few sellers). This is bullish and fuels the next swing higher (BO >7.65).

@finicky this looks much better than some of the roadkill you've been looking at lately (ADH, IRI).

 

[finicky]

Not sure where this guy is coming from but his fund seems to have outperformed the relevant indices for a while. He's included CDA in his top 10 portfolio, but some strange picks in there, like RRL. He's expecting a low growth high interest rate environment.

"In a scenario where there is low growth, yield investing runs the risk of falling into value traps, especially during an elevated inflation cycle with concerns of a recession. To navigate such volatile markets, the GARY (Growth At Reasonable Yield) model presents an approach that provides exposure to the top 10 stock ideas. These ideas are carefully selected to manage factors such as growth, value, yield, and risk, considering the current market conditions."

GARY Top 10: Yield investing has changed

Data driven multi strategy approach to yield investing for the next decade

www.livewiremarkets.com

 

[galumay]

Looking at his other holdings, I am inclined to sell CDA.

 

[mullokintyre]

Expect gold detector sales and thus CDA to rocketafter this gets out.
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Mick