Thoughts on Codan (CDA)
Codan has risen substantially. At $12 is well in excess of its fair value of $10.54, but it still seems to have momentum. Would you sell?
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Answer
Hi Peter,
A reminder we provide general advice only, and do not take into consideration any one investors circumstances.
This $2.2bn communications and metal detection business has enjoyed a strong recovery from its 2022 low. The company is forecasting solid earnings growth (~16%) as margins improve. Also, insiders are continuing to buy shares through May and June, albeit in a small way.
- CDA is on track to deliver higher margins and higher earnings, while the balance sheet is strong enough for them to consider acquisitions that would most likely be earnings accretive. We think the stock still looks solid.
