KOV - Korvest Ltd

[jkool]

Another of my searches into Aussie stock resulted in finding this little company (my analysis is as always here, this time with some graphs to make it more colourful: http://sog.shopinthemall.com/2007/02/03/australia-korvest-limited/)

Now from where I stand this is greatly looking company with excellet earnings growth and buletproof balance sheet.
Drawbacks? Well perhaps the size of it (market cap only around 50mil on a good day) and maybe the cyclical nature of its market.
Also for the investor with shorter term in mind the current price levels may be too high and the daily volumes are rather thin.

Anyone else ever looked at this stock?

Cheers
jkool

 

[robert toms]

Re: KOV - Korvest Limited

Yes I looked at them when they were under two dollars...then they got away from me...price wise.The largest shareholder is Hills Industries in Adelaide.Korvest has added at lot of revenue to Hills' balance sheet.I know a bloke who did work for them...at that stage their main work was galvanising metal products.

 

[jkool]

Re: KOV - Korvest Limited

Yeah for $2 that would have been quite a purchase Anyway with their rate of growth even $6 is not all that bad. Just that I dont really like purchasing stock on their 52wks highs or thereabouts.

 

[galumay]

Not surprisingly, not a lot of chatter about KOV! One of my recent additions to the portfolio, turned up in my regular scan through my filtered investible businesses on the ASX, not sure why it hasnt popped up previously. A nice, simple to understand, boring little business, well run, long record of profits with a blip in 2017, same with FCF and pays a dividend every year. Its ROIIC exceeds my hurdle rate as does its FCF yield. Cyclical, likely to see a swing up with the infrastructure spending post Covid.

 

[Trav.]

@galumay thanks for your posts mate as it give me some information to research on for the fundamentals of a business which I struggle with.

In this case I have deduced the following with the help of investopedia

FCF yield - Free cash flow - https://www.investopedia.com/terms/f/freecashflow.asp

ROIIC - Returns on Incremental Invested Capital - https://www.investopedia.com/ask/an...ate-incremental-return-investment-capital.asp

Now with KOV my chart had several buys from 2018 to present and would have been -4% and the buy and hold comparison in AmiBroker (excluding dividends) would have been +92% so you can see my interest in uncovering a few stocks like this one for a long term portfolio.

So thanks for the post and good luck with KOV

Market Index

 

[galumay]

Thanks Trav, it certainly wouldn't be most investors or traders, type of business. But if we were all doing the same things there would be no market!

 

[Dona Ferentes]

Initially, I like to look at what a company does, and how it's performing.
1. Korvest Ltd (KOV) is a South Australia based manufacturing company with principal activities comprising of hot dip galvanising, sheet metal fabrication, manufacture of cable and pipe support systems and fittings, design and assembly of access systems for large mobile equipment and sale, repair and rental of high torque tools. The Company has two segments: Industrial Products and Production. The company has sales offices located in Adelaide, Melbourne, Sydney, Brisbane and Perth, with distributors in Darwin, Townsville, Hobart, as well as New Zealand.
2. Earnings ... and Return on Equity
View attachment 112009

... then I'll have a look under the bonnet, see what is driving the longevity

 

[Trav.]

@Dona Ferentes attachment link not working mate. I am interested in to see what you make of the business.

Cheers

 

[Dona Ferentes]

@Dona Ferentes attachment link not working mate. I am interested in to see what you make of the business.

Cheers

not sure what happened there
.. trying again

Earnings lifting, and Return on Equity lifting. Nice trend, and to me a confirmation they're doing something right/ sticking to their knitting.
Just confirmation of what @galumay stated.

And then, i tend not to directly invest in such companies. I hold a few old fashioned LICs and if I drill into their holdings, usually the KORs of the world are held (and monitored more closely than I would) and sold at times.

 

[galumay]

Nice trading update for $KOV today, not much of a beneficiary of the Covid boom, so hopefully its sustainable growth. Share price popped nearly 10% in early trade.

 

[galumay]

Nice update today, reported a very strong start to H1 2022.

 

[galumay]

Another trading update, even stronger H1 than previous guidance, another 20% EBT, now looking like $9.8m.

 

[divs4ever]

Trading Update On 7 October 2021 Korvest announced that it expected the first half profit before tax, including the previously disclosed profit on sale of Power Step and Titan Technologies, to exceed $8 million.
The second quarter trading has exceeded expectations with a significant concentration of major project work and ongoing strength in the small projects and day-to-day markets. As a result, the preliminary trading results, which have not yet been subject to audit review, indicate that the first half profit before tax will be in the range of $9.4 – 9.8 million. Korvest’s half year results are expected to be announced on 21 January 2022 and will include an update on expected second half trading.

DYOR

i hold KOV ( av. SP $3.17 , so up 144% for me )

going nicely for me NOW , but there was a time my patience was tested ( and was wondering if i had got this one wrong )

 

[galumay]

Why am i not surprised we both own this!!

 

[finicky]

Not in, but still doesn't look expensive if it can trundle along at this pace. Sales don't seem to rise much? But return has been increasing.

 

[divs4ever]

i bought the first lot in October 2014 ( @ $5.90 ) and the last of 4 parcels in June in 2017 ( @ $2.35 ) ,

i was expecting a mining investment downturn but construction/infrastructure spending to rise , to help balance the economy

i guess the moral of the story is do NOT believe government policy ( or election promises ) when planning your investments , just pick solid companies and hope they find a way to survive

 

[divs4ever]

Not in, but still doesn't look expensive if it can trundle along at this pace. Sales don't seem to rise much? But return has been increasing.

the result did include asset sales , so i can only guess if that was ultimately wise

 

[galumay]

i bought the first lot in October 2014 ( @ $5.90 ) and the last of 4 parcels in June in 2017 ( @ $2.35 ) ,

i was expecting a mining investment downturn but construction/infrastructure spending to rise , to help balance the economy

i guess the moral of the story is do NOT believe government policy ( or election promises ) when planning your investments , just pick solid companies and hope they find a way to survive

Thats basically my approach, I dont believe the future is knowable so I never spend any time contemplating the future, whether its macro, policy, legislation, secular trends etc.

At the highest level I have tried to adopt the Terry Smith approach,

 

[finicky]

Can't do it myself but sounds good to me.
On the other hand why turn it into a school of orthodoxy? This sole approach excludes one from the benefits and disasters of speculation.

 

[finicky]

Terry Smith, 'Britain's Warren Buffet' gets paid a lot for #3 "Do nothing"