Good morning
@nihilism ,
As you may have guessed the purpose of my previous post was to challenge
@kama2 to provide some solid rationale to support his '
skyrocket'ing sentiment, as there has been very little in the way of solid discussion/debate on HC in recent times. But in any case I've done the necessary DD and have to agree that this stock looks undervalued at present (at least on paper) and potentially even more so based on current trends and future guidance. I wouldn't have become a major holder if I didn't believe that there was scope for a substantial increase in value of CNW's assets over time, and on that basis I probably should change my sentiment from 'none' to a 'buy'.
Having said all of the above, it is important that one doesn't get ahead of his/herself and let dreams of future riches cloud his/her judgement, and so my view is that the market is patiently waiting to see whether CNW can deliver a meaningful and sustainable profit before determining whether P/E's, DCF's and eventual dividends can be trusted and realised in due course.
Last financial year CNW posted a $400k profit (up from a $1.8m loss the year prior) and that's what initially sparked my interest (given the the low market valuation back then and indeed now). However the most recent half (June-Dec 2017) saw CNW post a $390k loss after tax and so my feeling at this moment is that the market still needs to be convinced of the board's strategy and is awaiting consistent profitability before a substantial re-rate can be justified.
The good news is that CNW's revenue continues to grow and as you pointed out the most recent quarter hinted that a reasonable profit could be on the cards for this FY - but then the market has already responded to this news by sending the SP up to the low 2c range (from the 1.4c low) so my thoughts are that holders should remain patient and await further confirmation in August i.e. should no FY guidance update be provided to the market prior.
Thus all in good time / Rome wasn't built in a day / patience is a virtue and must admit that in some ways I like the fact that CNW is one of the ASX's best kept secrets in that hardly anyone is talking about this stock's potential (unlike AVZ and other retail favourites that are subject to the constant influence of social media ramping, both up and down).
GLTA
Cheers
Elpha
