CDA - Codan Limited

[galumay]

That's why I just continue to hold it, sometimes its expensive, sometimes its cheap, its always a lot more than I paid for it!

 

[finicky]

.. sell , not reduce?

@divs4ever, I just meant historically it's had wild extremes. Not that many years ago it was being thrown away @ 50c, then recently it reached $18-$19 which was ridiculous by consensus. So I'm nowhere near reducing it now, in fact I bought quite a few uncomfortably close to the current price during the descent.

Africa is just about ready to catch fire .. is this the right time to get set early for a long painful recovery
not held , currently

I didn't have a reply to this before yesterday's boost. I really don't have much of a clue about the runway for the detector division of the business. The pig military have pushed aside the artisan miners in Sudan, Minelab's biggest market. Based on current earnings CDA doesn't seem like your cup of tea as it is hardly cheap?

 

[divs4ever]

its always a lot more than I paid for it!

and a very sound reason that is

good on you

 

[divs4ever]

@divs4ever, I just meant historically it's had wild extremes. Not that many years ago it was being thrown away @ 50c, then recently it reached $18-$19 which was ridiculous by consensus. So I'm nowhere near reducing it now, in fact I bought quite a few uncomfortably close to the current price during the descent.

I didn't have a reply to this before yesterday's boost. I really don't have much of a clue about the runway for the detector division of the business. The pig military have pushed aside the artisan miners in Sudan, Minelab's biggest market. Based on current earnings CD doesn't seem like your cup of tea as it is hardly cheap?

'cheap' not currently ( IMO ) , but how much am i willing to pay for potential growth

so far i avoided 'growth stories like BNPLs , RFG and some tech companies that never seem to make much profit

but mining in Africa ( and South America ) is liable to persist in the longer term

i would prefer 'cheap ' but any good investor needs some long term growth to resist inflation , as well

 

[galumay]

CDA Annual report released. No surprises. The FCF is starting to improve, about $20m after adjusting for accounting distortions, not great conversion rate compared to NPAT, but heading in the right direction. Steadily reducing debt with further reduction telegraphed for 2024.

 

[galumay]

So much for the efficient market! CDA down over 10% today, full results for 2023 exactly as the headline numbers they released to the market a couple of weeks ago - which saw CDA jump nearly 7% on a red day for the market. This is why a true long term view is so important in investing, this is the crazy Mr Market yelling meaningless prices over your fence that Ben Graham talked about. Learn to ignore the noise!

 

[finicky]

Codan kicking a goal today following AGM chair and CEO address.

Held

 

[galumay]

Capital allocation is such an important aspect of Management Quality, so often over looked or misunderstood by investors. (and Managers!)

 

[finicky]

Don't get the nuts and bolts of it at all, but pushing that trifle aside this looks like a great little acquisition. Costing only 4 times ebitda of the target, payments spread over 4 years, immediate earnings accretive and that's without the synergies and growth in sales that they obviously anticipate. Also, the target (Wave Central) has been our unit's (Domo Broadcast) distributor in North America for 15 years. Domo is strong in Europe, Wave is strong in America. Orgasmic.

Held

 

[galumay]

Seems like a logical bolt on to existing business. More evidence of the careful capital allocation, not just acquiring for the sake of it or to inflate management earnings!

 

[peter2]

CDA breaking out of it recent six month range. Now making new yearly highs. It's a long way back to the old highs at $19.

 

[finicky]

It's a long way back to the old highs at $19.

I almost (but not quite) hope it doesn't get back to $19 again as it causes a nervous quandary - "do I sell, and if so will I be able to get back in?". Also CGT.

 

[galumay]

Agree, @finicky. $18.99 would be better. Then we can just continue to hold.

 

[finicky]

Current chart of CDA. It has retreated over the last 5 weeks but on low volume. The resistance was at $9 which was also the final swing high of the past dowhtrend. Just suggesting that $9 is a significant hurdle. While price has 'overbalanced' the main uptrend it has continued with a shallow uptrend which is still intact despite recent weakness.
Might be waiting on the Dec Half report which came at Feb 16 last year.
However last year an earlier trading update came at Jan 24.
For a higher price I imagine the need for 1H24 to show improvement to the pcp and an indication that profitability is beginning a return towards the higher average 26% ROE of the 6 years before FY23. Might be too big an ask for this Half where they are settling in acquisitions and competing against a $20 contract payment in the pcp? Quite a good chart though, so I'm undecided (again)

Held

WEEKLY

 

[Garpal Gumnut]

Thanks @finicky

That is a very nice chart. There is room for a rising price in anticipation of results as much as after.

gg

 

[finicky]

Reports H1 tomorrow.

My feeling is it should be a sensitive one with regard to price. E.g. Are the acquisitions knitting in well and are they earnings accretive yet. Is profitability (ROE) showing signs of returning to normal. Codan doesn't usually give full year guidance at half year to my recall.
Chart still equivocal but seems to lean positive to me - a third challenge of the $9 hurdle? see weekly chart (not shown)

Held

DAILY

 

[finicky]

CDA up 10% @ $9.30
Strong H1
Increased engineering development spend
Revenue growth guidance for full year 2024 vs FY23 in both Communications (expected up 15%) and Minelab (expected up 20%)

 

[galumay]

Gotta be happy with that, @finicky, should go hard today! The reversion to mean of the FCF is good to see as well.

EDIT: failed to click the post button this morning, so its out of sequence!

 

[finicky]

Fwiw, Macquarie's on CDA's HY24 release (from FN Arena via livewire)
$10.65 is its new 'target'

 

[galumay]

Damn, @finicky. Now I have to sell, its almost certainly headed down.