buying CCP at $9.62, page-18

Let's examine what happened with CCP, why it happened, and if it can be duplicated.

Its now 3 trading days since HY result was released. SP has leapt from 9.91 - 11.62. That's 17.2%. We are all happy with that but why did it happen?

The SP leapt because CCP beat mkt expectations. Yet the HY almost exactly matched the expectations of many holders here on HC. Several of us posted our forecasts and we all were pretty close. How did we know better than the mkt? I can't explain it except to say the forecasts posted here on HC and wk done on our spreadsheets at home was accurate because it closely matched the forecasts disclosed to mkt by CCP itself.

a) In early August the yr end result had a detailed outlook statement re FY16 eps (86c - 91c) and divs (44c - 46c).
b) In early Nov the FY16 outlook was confirmed and strengthened. EPS increased to 91c - 95c.
c) Last week the HY outlook was again strengthened to 95c - 97c.

Back in mid Dec (see OP) i posted:

I have following:
FY16 eps: 93c
ROE: 22%
Div 47c f.fr = gross yield of 6.9%.

Good enough for me although i hope they don't expand too fast as they bed down their entry into USA.

Very similar to what others including Pioupiou has estimated. So the real surprise is that the mkt is 'surprised'. They only had to read company reports (or HC) to see what was most likely to occur. And its exactly occasions like these that offer retail shareholders the opportunity to make some biggish profits fast along with a highish decree of certainty. If CCP didn't know what its future earnings were likely to be... then who did?

So we have a CG of 171c and a gross HY div of 33c. Total of 20.6%. But that's assuming one bought just before the HY. However the SP between early Oct and late January (almost 4 months) was below $10.00. For a few days late Oct/early Nov it went below $9.00!! that's despite the strong forecast for FY16 being made public almost 3 months earlier! Had one bought then the gain would have been over 33%! Massive. LOL... i missed that chance as well despite having plenty time to get on board.

My thory is: The mkt is always right but never perfect. I seek these opportunities to make a sharp CG combined with high/very high divs.

Thing is... what to do now? If i sell now I've made 20.8% in 6 weeks. If i hang on for another few weeks i gain an additional 33c (gr HY div) but risk the SP falling.

Before i buy i spend ages calculating what i reckon the Intrinsic Value (IV) of a stk is. I aim to buy 3-8% below this price. Before buying I also estimate where the SP will be in a) early March and b) late August. Obviously it is a guesstimate but i do this to see if SP does what i expect it to.

I also only buy a share if i reckon the total return is at least 13-15% and preferably 20%... within 3 months. Less than this i feel is too low a return in current fragile mkt environment. So I've hit my first target. If SP keeps rising i will sacrifice div and take profits. If i feel CCP can keep es growing i'll keep until div date then look to sell. I seldom hang onto shares once my target has been reached.

Tomorrow I'll post re other ASX stks which i feel can match the recent performance of CCP. GLTH. what a good 3 days it has been!