Technology business CDA focuses on areas such as radio communications, metals detection and tracking solutions, unfortunately it’s almost halved from its 2021 high as the stocks valuation appeared to get ahead of the actual outlook. At the companies AGM meeting the board expressed its opinion that COVID tailwinds which added $15-20m to earnings are unlikely to be repeated although the company’s growth looks to be following its 3-year plan if a touch light into 2022, the real issue was the stock had simply rallied too far, too fast.
It may take a while to regain the markets confidence but the stocks interesting around $10 on a valuation and even yield basis i.e. CDA’s forecast to pay a 2.6% fully franked dividend over the next 12-months.
MM believes CDA looks good value around $10
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