I am new here so forgive me if I get something wrong.
Management are confident that they will exceed 1HFY21 profit numbers. But wording from management suggests it may not be massive growth. Over the past 2 financial years profit has increased an average of 28% year on year. lets halve this to be conservative (14% profit growth).
SOI= 180.88m Predicted net profit (using 14% growth) = 103m
I am unsure of what PE ratio is common for CDA so I will use 20.
20 = x / 0.569 x = 11.38
Share price fair value = $11.38
That's an 11% increase on current share price by the end of the financial year when reports are released. New investors may look elsewhere for larger returns. Obviously this is 100% guesswork and my growth margin is likely to low, but I like to look at worst case scenarios when making investment decisions.
Would love to hear others thoughts.
CDA Price at posting:
$10.25 Sentiment: None Disclosure: Not Held
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