Australian (ASX) Stock Market Forum

CZZ - Capilano Honey

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luutzu said:
So what are the guy's claims and why are they false?
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There is lots of false claims and misleading claims

eg,
capilano mixes imported honey into their capilano brand.
capilano adds sugar syrup to their honey,
capilano honey is fake because it feeds bees chinese pollen,
capliano paid choice magazine for positive reviews,
capilano under pays it contract bee keepers (they are actually paying $1 more per kilo that the market rate)
capilano honey is toxic

Then when faced with the truth, he ignores it and continues saying the lies.
 
Triathlete said:
I actually would not be surprised to see this stock come back all the way to the $14.90 level .
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After being in a trading range for 14 months we might finally see the stock come back to this $14.90 level I mentioned a while ago.

Closed today at $16 after a near 6% fall today.

Monthly and weekly charts do not look good at the moment....any other views from those that hold??????
 
Triathlete said:
After being in a trading range for 14 months we might finally see the stock come back to this $14.90 level I mentioned a while ago.

Closed today at $16 after a near 6% fall today.

Monthly and weekly charts do not look good at the moment....any other views from those that hold??????
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The Daily looks stronger towards year's end. Volume is also good, especially for this time of year.

CZZ n 29-12-16.png


It could be "window dressing", but volume appears to be demand. I'm happy to hold at these levels.
 
pixel said:
The Daily looks stronger towards year's end. Volume is also good, especially for this time of year.

View attachment 69264

It could be "window dressing", but volume appears to be demand. I'm happy to hold at these levels.
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I would like to see the weekly swing turn up first for more confirmation that the low is in if I was trading on the daily chart.

There was some positive comments previously about this company and I was curious as to why there was a sell off...have the fundamentals changed...???

As of this moment I am still expecting it to go lower unless my chart tells me otherwise.
 
Last edited:
pixel said:
(The Kiwis try to make "Manuka" into a trademark. Does that mean The Canberra suburb of Manuka and the Manuka Footie Oval would have to change their names? :p )
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I suspect they may be successful, they were certainly making and labelling honey from Manuka long before anyone in Australia copied them with the labelling. NZ also made the 70% minimum pollen content rule for labelling as Manuka. It would be consistent with a lot of rulings about food and drink names world wide.

I know that your comment was tongue in cheek, but of course that would have no relevance to the suburb or footy oval!
 
galumay said:
I suspect they may be successful, they were certainly making and labelling honey from Manuka long before anyone in Australia copied them with the labelling. NZ also made the 70% minimum pollen content rule for labelling as Manuka. It would be consistent with a lot of rulings about food and drink names world wide.

I know that your comment was tongue in cheek, but of course that would have no relevance to the suburb or footy oval!
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Agree on both counts, galumay :)

In Australia, it's known as the Ti-Tree (or Tea-Tree) the oil of which has been known to have anti-bacterial and anti-fungal properties. "Leptospermum Honey" may not have the same ring as Manuka Honey, but the Ti-Tree image could be built up.

Incidentally, it may sound parochial, but Jarrah has been shown to have the same potency.
 
Triathlete said:
I actually would not be surprised to see this stock come back all the way to the $14.90 level .

It is at the 50% retracement level at the moment of the last range so at an important point right now, let us see if it will hold.

If we look at the last two ranges starting 18/09/2015 high and retracing to 3/7/2015 and the second retrace to 14/11/14 we can see price clustering at the 75% and 50% levels.

That is what I am thinking at the moment since it has bee in a downtrend since September 2015...time will tell though.
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Well it took 16 months to hit this $14.90 level and the day low of $14.56 but did eventually close at $15.77.

The question has to be now how much lower can it go..??

Price move somewhere between 10% and 13 % move in price yesterday depending how we calculate it.

Anyone who follows the stock have any information that would have caused this movement...does not look like it is finished just yet.
 
Triathlete said:
Anyone who follows the stock have any information that would have caused this movement...does not look like it is finished just yet.
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I think it is just the market misinterpreting what I think was actually a good HY report.

If you read some of the other forums out there people are freaking out over inventory, cash flow, accounts receivable, and a reduction in the low margin export etc, but it all looks good to me.

I sat down this morning and put together a spread sheet laying out the key financial information from 2011 till now, and it looks like a solid value generation story to me, when you look at the big picture you see steadily increasing return on equity, growth in revenue, cash generation that's been wisely reinvested in acquisitions, you see the inventory draw down and increased cashflow during the shortage and you see cash being used to rebuild inventory after the shortage.

It's a really good picture to me, the only fuzzy bits are the unknowns when it comes to the earning power of the companies investments into honey production and the return that will come from the $1.3 million investment in beeotic.

Besides that, domestic sales were up 5%, retail exports grew, industrial exports shrank but that was an exit from low margin bulk sales.
 
Value Collector said:
I think it is just the market misinterpreting what I think was actually a good HY report.

If you read some of the other forums out there people are freaking out over inventory, cash flow, accounts receivable, and a reduction in the low margin export etc, but it all looks good to me.

I sat down this morning and put together a spread sheet laying out the key financial information from 2011 till now, and it looks like a solid value generation story to me, when you look at the big picture you see steadily increasing return on equity, growth in revenue, cash generation that's been wisely reinvested in acquisitions, you see the inventory draw down and increased cashflow during the shortage and you see cash being used to rebuild inventory after the shortage.

It's a really good picture to me, the only fuzzy bits are the unknowns when it comes to the earning power of the companies investments into honey production and the return that will come from the $1.3 million investment in beeotic.

Besides that, domestic sales were up 5%, retail exports grew, industrial exports shrank but that was an exit from low margin bulk sales.
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Thanks for your assessment VC.....
 
A response to some of the claims made in another forum.

-----------------
I actually think its a pretty good result, I am pretty happy with company so far, there are a couple of factors causing the result to not appear as good on paper as it is, but I think by the full year report these will start to clear up and value generated will show up in the report.

Some posters here have made negative comments about certain things, which I think they have failed to fully understand, let me point out some of this below.

claim 1 - Inventories are to high, and this is a problem - False

Inventories are not overly high, inventories are currently about 27.5% of expected annual sales this compares to 25.4% in 2013 before the shortage, so they have only just received to about where we want them, and its not a problem because as pointed out already we can run them down anytime we need to, here is a comparison of inventory to sales for the last 4.5 years.

2013 - 25.39%
2014 - 15.97% (shortage)
2015 - 19.31% (slight recovery)
2016 - 29.03% (full recovery)
2017 - 27.5 % (optimal)

claim 2 - Decline in Margins over recent years - False

When you take into account all operating expenses, the average profit margin over the last 5 years was 8.38%, in this report it was 8.58% pretty much right at the five year average, and thats with the beeotic costs, and other noise, so really the operating margin is well above the 5 year average.

Claim 3 - Receivables are to high, and they are being screwed - False / incorrect view

Receivables are 17.2% of annual sales, thats less than their 5 year average of 17.69%.

but thats only half the story, the net amount of capilano's funds tied up in these receivables is a much smaller number than the total amount, because capilano also owes their supplies,

In the half year report customers owed Capilano $23, 585,405, but capilano owed its suppliers payables of $$15,814,781, So Capilano only had $7,770,624 of its own funds tied up, which is 5.6% of annual sales, roughly 20 days, not where near the 1/3 of a year claimed.

claim 4 - Running out of cash / no cash generation - False.

Capilano have been generating plenty of cash, they have just been investing it in worth while things.

In the last 5 years they have bought 2 packing plants, Invested in 2 honey production JV's, rebuilt inventories, more than doubled the dividend, and launched a new product.

The honey inventory is more liquid than most other companies inventory (Pardon the pun), it can be turned back into cash rapidly, its basically like storing gold bars, that you get to sell at a profit.

Claim 5- demand has dropped off - False

Domestic sales are up 5%, exports (except bulk industrial) are up, where is the lack of demand?
 
galumay said:
(my bolded, italic.)

The use of the first person personal when talking about an inanimate corporate entity always makes me consider that the person discussing has far too much emotional capital invested!
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The "we" refers to us shareholders.

Eg, "we would want the stock levels to be at that level"

you could also use "we" when discussing negative things, e.g. thats going to lead to litigation and "we" don't want that.

I can't see a problem with a group of owners talking to each other using terms such as that when talking about their company.

I mean if I am talking about a companies businesses with another share holder I might even say something like "Our mines are the lowest cost producers in the Pilbara" I don't think it means I am getting emotional
 
Value Collector said:
I don't think it means I am getting emotional
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Ok, hope I didnt offend! Anyway, the perception remains for me. I am also unconvinced you are talking collectively as the shareholders, because when you say, "...we can run them down anytime we need to." that doesnt sound like something the shareholders can do!

Anyway, its rather petty on my part, but I do respect and enjoy what you post VC, and hence I thought it was worth sharing my perceptions of the use of the first person, personal. I am sure you would share my belief that psychology and emotion play very important roles in markets and we should always be on guard for biases that may influence our critical decision making!
 
galumay said:
Ok, hope I didnt offend! Anyway, the perception remains for me. I am also unconvinced you are talking collectively as the shareholders, because when you say, "...we can run them down anytime we need to." that doesnt sound like something the shareholders can do!
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No offence taken, it's just the way I generally talk about the companies I own, don't look to deep into it, I am just basically saying that the company wouldn't have any problems running down the stock.

Saying that though, I don't see companies as these bits of paper we trade, I see the company as a conduit used for the share holders to own the assets, So if we are talking about capitano's inventory, I don't see it as something completely unrelated to me as a share holder, it's my property, when I buy shares I see it as owning the under lying assets, so yes if I am talking with other shareholders I will say stuff like "Our inventory" "We could run it down" because I see the management as people working for us, working with our assets.

It doesn't mean I have an emotional attachment, it's just part of how I think and talk about companies.
 
Value Collector said:
It doesn't mean I have an emotional attachment, it's just part of how I think and talk about companies.
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Ok, I also see my shareholdings as part ownership of the company, I just dont identify with the inanimate entity to the extent that I would talk about it in the first person.
 
VC you identified the company very early on and secured what I imagine would be a very good average price. Now you can let the divs roll in.

But the price even after the pull back is at historical highs, its seems the "growth" has occurred and now CZZ is another well run well priced company. As a value collector, do you still see value in the company ie are you still accumulating?
 
galumay said:
Ok, I also see my shareholdings as part ownership of the company, I just dont identify with the inanimate entity to the extent that I would talk about it in the first person.
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Do you really think I was saying "we" as in me and the inanimate entity?

"we" obviously refers to people, e.g., shareholders and management.

e.g. "we (shareholders and management) can run down stock if needed"

anyway, this line of discussion is tiresome.
 

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