CMP general meeting is today. While the share price has been disappointing given new sales order, it reflects the degree of uncertainty that the market think has in its guidance. However, I do believe that a lot of trades were executed based on algorithm and technical analysis by computers, without actually valuing the company.
Here's a list of points to look for in the meeting.
1. Is guidance achievable and sustainable? Sales $40m-$42m, $5.0m-$6.5m EBITDA, NPAT $4.0m-$5.0m
2. US division performance and its restructuring. CMP said it was done with restructuring and recouped most of the missed sales. How reliable?
3. More MEG delivery and sales. Can CMP continue its momentum?
4. eHealth development. Based on news from 2016, it was supposed to be launched this year. Is it possible still?
My take on the valuation:
If CMP meets "1 " and "2" point, the share price would be worth 50c to 60c
If it can also meet "3", SP would be worth over 80c
If it happens to meet "4", SP would be worth over $1
I continue to hold. Value investing is not about popular vote in the market but weight-in contest by firm's earning power over time. It takes time to see which firms truly excel.
CMP Price at posting:
35.0¢ Sentiment: Buy Disclosure: Held
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(20min delay)