Hi Guys,
We discussed CDA earlier in the week, this is a technology business which 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 their recent AGM the board expressed its opinion that COVID tailwinds which previously 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.
Unfortunately 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.
PBH has fallen in very similar fashion to CDA after they reported higher than expected cash burn, as we said previously they certainly won’t die wondering as they spend a heap on advertising to support growth – Shaq does not come cheap!
MM still owns PBH in our Emerging Companies Portfolio & I actually bought a few more on Friday for myself.