CDA is undervalued?, page-27

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edgck

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20/10/21

22:34

Post #: 56951945
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Originally posted by petertanaka: ↑

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.

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This is what I was thinking. Timing though is fairly hard. I still see potential with the latest acquisitions with the nextgen 911 the most exciting part.

Hopefully I can look back and see that $12.40 was a bargain. Average buy price is now around $8.

CDA Price at posting: $13.33 Sentiment: Hold Disclosure: Held
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(20min delay)
Last $20.18		Change 0.095(0.47%)		Mkt cap ! $3.664B

Open	High	Low	Value	Volume
$20.25	$20.30	$20.03	$3.668M	181.7K

Buyers (Bids)

No.	Vol.	Price($)
9	126	$20.17

Sellers (Offers)

Price($)	Vol.	No.
$20.18	3	2

View Market Depth

No.	Vol.	Price($)
11	400	20.150
2	72	20.140
3	361	20.130
2	141	20.120
1	140	20.110

Price($)	Vol.	No.
20.160	110	5
20.170	2	2
20.180	132	1
20.190	492	2
20.200	475	2

Last trade - 15.05pm 30/06/2025 (20 minute delay)

CDA (ASX) Chart

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