What’s up with Codan (CDA)?

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

Ask a question

The Latest Q&A

Question asked 23/10/2021

What’s up with Codan (CDA)?

Hi James and team. What are your current thoughts on Codan (CDA) ? They beat expectations in Feb and Aug and have subsequently had a decent pullback in their share price. Cheers, Jan P.

Answer

Hi Jan,

For those not familiar with Codan (CDA) it designs & manufactures the likes of radios, metal detectors and mining systems for use in tough mining style environments. The company has been on the acquisition trail in 2021 while also delivering strong results for the year but many regarded its outlook for FY22 to be underwhelming and the profit takers emerged on mass.

However after correcting 40% we believe value has returned and we like the stock around $13 from a risk / reward perspective especially as CDA has a 5-year track record of overachieving conservative forecasts i.e. under promise and over deliver.

chart

Codan Ltd (CDA)

LAST UPDATED 23/10/2021 08:05

Latest Reports

Afternoon report 18/04/2024

The Match Out: ASX snaps losing streak, BHP Qtly in focus

The local market shook off weakness in the US overnight to open higher, largely thanks to our Resources exposure that continues to find some support following trade sanctions on both China and Russia. Late morning saw local employment data land with the mixed numbers largely disregarded by the market. Buying picked up in the early afternoon as yields started to roll off, though equities couldn’t go on with the move, ultimately though the 5-day losing streak for the ASX was snapped with a ~0.5% gain today.

Morning report 18/04/2024

What Matters Today: Do we like Gina’s ongoing buying into rare earths?

Yesterday saw Gina Rinehart emerge as a significant player in Lynas (LYC) after taking her stake to almost 6% over the last few days, although compared to her net wealth, the purchases were a poultry drop in the ocean. LYC is the world's largest non-China producer of rare earths, although China still produces almost 70% of the world's rare earths, with Australia's ~5% output more of a supporting role. Gina's move could be largely motivated by her intention to merge US-listed MP Materials (MP US), which has a market cap. of ~$4.3bn, and the local and larger $6bn rare earth player Lynas (LYC), i.e. it would form a relative $10bn rare earth giant.