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These two look worth a watch to see how market sentiment and selling for liquidity treats them over the next few months. For my tolerance neither would be a buy now except for nibbles. I put them together because both are technology manufacturing companies with global markets, they both have net cash, both were growing before this happened, both have some sensitivity to gold mining ... and also, I hold both.
Codan Ltd (CDA)
Imdex Ltd (IMD) I have made a comment on the Imdex board about it.
Codan had a pretty awesome Cal 2019 and two months of 2020 up to the crash. It became overrated as a tech growth stock and the 2020 global Wuhan CCP Plague triggered a ~50% drop from the high to the low point so far.
It's still too expensive at my forward est p/e of 19 in this fearful environment but it reported a record earnings 1st half fy20 and recently said its Mar Qtr trading is much the same. Its Malaysian plant has been closed down for a couple of weeks but it has more than enough inventories to supply outlets for that time.
Codan has zero long term debt and $65m cash as at March 19. Inventory and receivables outweigh payables.
I figure its good for 26c eps for full fy20 of which it will retain 13 cps giving an estimated fy20 book value of 1.31
So, fy20 estimated eps 26c,
p/e is 5.00 ÷ .26 = ~19
Retained earnings = 13c
FY20 bv = 1.18 + 13 = 1.31
FY19 ROE = 21%
What would you pay as fair value normally? Four times book value for a debtless business returning 21% on bv and retaining half its earnings to return the same on that?
$1.31 bv x 4 = $5.24
Or five times for growth in normal conditions?
$1.31 bv x 5 = $6.55
The share price chart to me suggests $3 - 3.50 so beware
Codan Ltd (CDA)
Imdex Ltd (IMD) I have made a comment on the Imdex board about it.
Codan had a pretty awesome Cal 2019 and two months of 2020 up to the crash. It became overrated as a tech growth stock and the 2020 global Wuhan CCP Plague triggered a ~50% drop from the high to the low point so far.
It's still too expensive at my forward est p/e of 19 in this fearful environment but it reported a record earnings 1st half fy20 and recently said its Mar Qtr trading is much the same. Its Malaysian plant has been closed down for a couple of weeks but it has more than enough inventories to supply outlets for that time.
Codan has zero long term debt and $65m cash as at March 19. Inventory and receivables outweigh payables.
I figure its good for 26c eps for full fy20 of which it will retain 13 cps giving an estimated fy20 book value of 1.31
So, fy20 estimated eps 26c,
p/e is 5.00 ÷ .26 = ~19
Retained earnings = 13c
FY20 bv = 1.18 + 13 = 1.31
FY19 ROE = 21%
What would you pay as fair value normally? Four times book value for a debtless business returning 21% on bv and retaining half its earnings to return the same on that?
$1.31 bv x 4 = $5.24
Or five times for growth in normal conditions?
$1.31 bv x 5 = $6.55
The share price chart to me suggests $3 - 3.50 so beware