Comvita - CVT

[Catalyst]

Looks like the company's hard-nosed response has scared off any likelihood of a higher bid, which is what we all were hoping for.

I do agree with the company, though, that $2.50 was a joke. PE of 10.0x FY12 forecast NPAT of around $7.5m and EV/EBITDA multiple of 6.3x (assuming EBITDA of $14.5m and $17 net debt).

I still think that CVT should be trading on higher multiples then those above. Either the market is saying the company's forecast earnings are optimistic/unsustainable or the market is waiting for further proof that CVT can achieve those numbers. I hope it's the latter, in which case CVT should rerate up (once the short-term traders have exited) over the coming year.