CDA is undervalued?, page-24

Codan has been delivering multiple earning upgrades for the past few years and an EPS growth of 35% from 2018 - 2021.

The recent underperformance is mainly related to two issues

1) Retirement of CEO
2) Market seems to believe that the best days are over for Codan, the gold price has reached an all-time high, they are crushing all their competitors and the law of large numbers means growth will slow

It is hard to find a company with such a high growth rate, quality of the balance sheet, and margin to trade at such low valuation, I believe Codan is now undervalued by the market. The retirement of Donald is surely a bad thing but remember when Steve Jobs retired and Tim took over, they were all saying that is the end of Apple. Same goes with Buffett retiring and end of Berkshire..... I think every good quality company will have built a culture of good succession and legacy, the transition of CEO is not abrupt but rather planned, it will be smooth and the Codan will remain a quality company after Donald retires. he may in fact remain a consultant or play an advisory role in the company after retirement.

Sure, we cannot expect codan to grow at 35% plus from now on (it is not priced for that anyway), but management did hint at a strong start to FY 2022. What I find pleasing with Codan is that the management always under promise and over deliver. Which is very reassuring. We must understand that Codan is now a much better business than 5 years ago, a much diversified business, and a stronger balance sheet.

Conclusion: an excellent business with top notch management/product that's unloved by the market at the moment, the fact that it has delivered such amazing growth over the past 5 years, bought out 2 companies without raising a single cent of capital from shareholders, paid record special dividend, plus it is not priced for another year of 35% growth, but it will surprise us again to the upside.... It's a buy for me.