Comvita - CVT

[heisenberg]

"Global natural health products company Comvita (NZX:CVT) has promoted Mr Ben Shaw to the position of Chief Marketing Officer (CMO) and Mr Simon Pothecary to the position of Chief Sales Officer (CSO).

Comvita CEO Scott Coulter said, "Mr Shaw has responsibility for our global marketing strategy, planning and execution for Brand, Category and Product, Regulatory Affairs. His role will ensure a high degree of coordination across our businesses and markets and deliver a consistent brand experience.

Chief Marketing Officer (CMO), Ben Shaw; BA, PGDipCom (Marketing) Ben Shaw joined Comvita in September 2015 as General Manager Category. He was previously Senior Category Manager at Asahi Premium Beverages where he oversaw the Beer and Cider portfolios. During this period he launched a number of new brands including the Boundary Road Brewery craft beer range and worked with multiple international brand owners. Prior to this he was Marketing Manager at Les Mills International and held numerous marketing roles at DB Breweries."

Sounds like an excellent acquisition.

[Gunny]

Technical question.
What distance do you stand from your dart board to throw your darts?
I am trying to compare the 5 pace standard to a 10 pace.
I have found the longer period the moving average is, the more defined is the trend.
I was wondering if this is also the case with the dart board.
I am concerned if I used too longer a distance I may not hit the dart board.

I vary the dart board conditions depending on the perceived risk factors. For example with Comvita I stand just beyond arms length but with Blis I stand in the next room and have the board swinging from side to side.

Gunny

[Beagle]

I'm probably in no position to judge but they seem to have made a number of good appointments in recent months. Happy holder.

[Gonzo]

How big is the dart board LOL

[Gunny]

How big is the dart board LOL

Good idea I could vary that as well. Sea dragon could be dime size though.

Gunny

[Beagle]

Sea dragon convertible loan amounts to circa 7.5 cps for so recent SP weakness could be a little overdone...

[winner69]

Had a chat with the yield seeking neighbour I have. A group down the bowling club cashed in their term deposits and have had bad experiences with HLG and after cutting their losses on that went to AIR and after collecting the dividend sold them at a loss and moved into Comvita as the next hot stock. These guys apparently are pretty clique and like following each other.

Nearly $13 they paid and now lamenting another capital loss.

Brokers seem to be encouraging them poor buggers. I told him either go back to term deposits or just hold on to his Comvita shares and hope it'll be alright.

Betcha many oldies are lamenting buying shares for the dividend - but some probably done very well

[King1212]

Had a chat with the yield seeking neighbour I have. A group down the bowling club cashed in their term deposits and have had bad experiences with HLG and after cutting their losses on that went to AIR and after collecting the dividend sold them at a loss and moved into Comvita as the next hot stock. These guys apparently are pretty clique and like following each other.

Nearly $13 they paid and now lamenting another capital loss.

Brokers seem to be encouraging them poor buggers. I told him either go back to term deposits or just hold on to his Comvita shares and hope it'll be alright.

Betcha many oldies are lamenting buying shares for the dividend - but some probably done very well

That is a nasty experience, escaping a small fallen tree then got crushed by a big tree.

[couta1]

That is a nasty experience, escaping a small fallen tree then got crushed by a big tree. Most of the time it's best to just let the trees keep growing rather than chopping them down prematurely.

[Beagle]

Most of the time it's best to just let the trees keep growing rather than chopping them down prematurely.

Agreed and especially the case when they're growing at nearly 70% per annum !

[winner69]

Neighbour and his mates happy with the dividend they got the other day ...but me neighbour says he got 10 cents but his shares have lost 80 cents. Got his beer money but less beers in a few years time is how he puts it.

Been screwed they reckon - i said just bad timing and told him best plan now is probably to hang in there and hope it all turns into milk and honey ....but reminded him to tell his mates not to let the hype get to them in future and thats there no such thing as free money.

[Beagle]

But heaps of Comvita products with the shareholder preferred 20% discount card and their skin will be as smooth as a baby's bottom, they'll be in superb health from the manuka honey and hold and the 70% growth will see them ahead in the medium term. All sorted mate :)

[heisenberg]

Hoping for some great news in the EOFY announcements to stop this downtrend or else I might have to jump out for a little while...

[Apathy]

Hoping for some great news in the EOFY announcements to stop this downtrend or else I might have to jump out for a little while...

Exiting SEA would halt the slide - 10% gone in since announced increase stake holding 30 days ago. Unlikely to be anything in the full audit report due this week which will halt the slide.

[RupertBear]

Seems to be going down like a lead balloon ... Wondering if it is time to get out?!

[LAC]

Seems to be going down like a lead balloon ... Wondering if it is time to get out?!
Why though? Is it due to China's retaliation on NZ Exports?

[Beagle]

http://www.4-traders.com/COMVITA-LTD-6497045/consensus/

Winter normally their slowest time of year for product sales. Aussie is a big market for them, perhaps the high $Kiwi has been a factor in recent weakness. Quality high growth stock trading on a reasonable PE for its growth rate. Disc: Holding

[winner69]

Seems to be going down like a lead balloon ... Wondering if it is time to get out?!

Hope my neighbour and his mates down the bowling club haven't noticed

Buying in just under $13 because divies are better than deposits not a good move and to think told them to hang in there.

Some 15% off recent highs, ouch.

Glad i stuck with Trilogy when somebody told me Comvita was a great buy a while ago - greater growth prospects with Trilogy and still cheap as

[Beagle]

Honey good for you mate...its mentioned in the bible many times...have a look. Scented candles thing just a fad to appeal to people's psychological state of mind....make them feel better about their mundane lives.

[winner69]

Honey good for you mate...its mentioned in the bible many times...have a look. Scented candles thing just a fad to appeal to people's psychological state of mind....make them feel better about their mundane lives.

But Trilogy ageing cream just as good as if not better than Comvita stuff - esp for old accountants ha ha

[couta1]

Honey good for you mate...its mentioned in the bible many times...have a look. Scented candles thing just a fad to appeal to people's psychological state of mind....make them feel better about their mundane lives. They probably had Rosehip back in bible times too mate, just havent translated the Hebrew word into english text, Trilogy share price should equal Comvita in a few years aye winner, or close to it will do me.

[Beagle]

All good mate. CVT due for a share split soon so you never know your chances, you might get lucky :)

[LAC]

All good mate. CVT due for a share split soon so you never know your chances, you might get lucky :)

lol love that comeback:)

[Beagle]

lol love that comeback:)

Was thinking a 5:1 split :D :D

[IAK]

Maybe CVT won't need a share split after all.

[winner69]

Maybe CVT won't need a share split after all.

Maybe only 2 for 1 (instead of rogers suggested 5 for 1 ) to get it Trilogy's price in a few weeks

[kiora]

Maybe only 2 for 1 (instead of rogers suggested 5 for 1 ) to get it Trilogy's price in a few weeks

W69,Shhh please don't Jinx TIL

[winner69]

W69,Shhh please don't Jinx TIL

TIL is still so undervalued i don't think it can be 'jinxed'

No worries

[Beagle]

Maybe only 2 for 1 (instead of rogers suggested 5 for 1 ) to get it Trilogy's price in a few weeks

Don't be mean, it's beneath you mate.

[winner69]

Don't be mean, it's beneath you mate.

Sorry mate

Only falling on light volumes. It'll have it's day again

Still long way above 200MA

Every time i see my neighbour I run for cover - he and has bowling mates bought in near 13 bucks because term deposits weren't returning anything. I told him to hang in there this time around and not sell out of a losing position this time if stocks were preferable to term deposits (their previous 2 goes at seeking better returns from shares cost them heaps)

[stoploss]

Sorry mate

Only falling on light volumes. It'll have it's day again

Still long way above 200MA

Every time i see my neighbour I run for cover - he and has bowling mates bought in near 13 bucks because term deposits weren't returning anything. I told him to hang in there this time around and not sell out of a losing position this time if stocks were preferable to term deposits (their previous 2 goes at seeking better returns from shares cost them heaps)

Surely they should have gone into something that had a bigger divvi yield if they trying to replace a cash deposit ?

[winner69]

Surely they should have gone into something that had a bigger divvi yield if they trying to replace a cash deposit ?

They lost out with AIR and HLG so their thinking was both divies and capital gain.

Thought CVT was the next hot stock

Everybody not as smart as we are.

[stoploss]

They lost out with AIR and HLG so their thinking was both divies and capital gain.

Thought CVT was the next hot stock

Everybody not as smart as we are.

I'm not claiming that , still hold a small amount of CVT but taken 80% off the table . However this is in some ways a risky stock .
Subject to the vagaries of the weather, Manuka does not always flower each season apparently , bees subject to disease , varorra etc ...Put this up against insatiable Chinese demand , but we have seen that with milk powder in the past ......
Some people should be happy with boring things like MEL imo ....

[emveha]

Speaking of risks, was there ever a follow-up to the fake manuka honey scandal?

[Cricketfan]

I'm not claiming that , still hold a small amount of CVT but taken 80% off the table . However this is in some ways a risky stock .
Subject to the vagaries of the weather, Manuka does not always flower each season apparently , bees subject to disease , varorra etc ...

I saw in the news yesterday that beehive thefts are becoming a bigger problem too.

[kiwidollabill]

Speaking of risks, was there ever a follow-up to the fake manuka honey scandal?

Alot of work currently being done in the background by the UMFHA, MPI as the China CIQ are turning up the heat. Think similar to the way the botulism scandal affected the NZ Infant Formula industry, there could be a clean up of suppliers into China. Whether this gets played out behind closed doors or in front of the media remains to be seen.

[Beagle]

CVT down about 15% in the last month while NZX50 up over 7% OUCH !!

Bargain or something wrong ?

[macduffy]

CVT down about 15% in the last month while NZX50 up over 7% OUCH !!

Bargain or something wrong ?

Probably a number of factors:

Reaction after a meteoric rise; concern about possible Chinese trade issues; publicity around theft of hives; investors selling big gains to seek higher yields. What have I missed?

Disc: Grumbling about missing this one.

[winner69]

Probably a number of factors:

Reaction after a meteoric rise; concern about possible Chinese trade issues; publicity around theft of hives; investors selling big gains to seek higher yields. What have I missed?

Disc: Grumbling about missing this one.

Maybe those brief 'annual' results to March weren't what they seemed from the headlines?

Hmm - might start digging

[IAK]

Stubbornly high NZ$.

Disc. Looking to add.

[winner69]

Just an observation - CVT share price seems to have heading south since they said they had taken even more interest in SeaDragon in late May

[winner69]

Stubbornly high NZ$.

Disc. Looking to add.

NZ$ high?

Jeez mate - NZ$ lot lower than what it was a year or so ago and CVT benefiting

[Beagle]

http://www.4-traders.com/COMVITA-LTD-6497045/financials/

For a company growing at such a rapid pace it seems to beggar belief they're on a forecast multiple of only 18 times FY17 earnings...that's below the average for the NZX50 and look at the analyst projected growth. Acknowledge there are execution risks and thanks to posters for pointing them out but there's risks in every business.

Company recently confirmed its on track to double sales by FY20.

[babymonster]

hardly see its MACD dips below zero.. and RSI is way oversold... might start to nibble some shares...

[IAK]

NZ$ high?

Jeez mate - NZ$ lot lower than what it was a year or so ago and CVT benefiting

Yep, but still high. http://www.newshub.co.nz/business/strong-new-zealand-dollar-becomes-market-focus-2016071810#axzz4FSZIHa8f

[Beagle]

Yep, but still high. http://www.newshub.co.nz/business/strong-new-zealand-dollar-becomes-market-focus-2016071810#axzz4FSZIHa8f

Dollar has dropped a bit since that article you referenced and the OCR rate cut next month should see a further correction.

[IAK]

Dollar has dropped a bit since that article you referenced and the OCR rate cut next month should see a further correction.

Maybe horticultural stocks are not the flavour of the month. Seeka and Scales not exactly setting the world on fire lately either.

[Fox]

Maybe horticultural stocks are not the flavour of the month. Seeka and Scales not exactly setting the world on fire lately either.

Hopefully once the China steel trade issue and 'threats' are cleared up, the market starts realising the current strong tailwind behind these exporters, particularly due to the efforts of the RBNZ to lower the dollar further and the beneficial year we had for harvests.

[winner69]

Edison research hasn't been updated since November (after H1 results) but seeing FY March was in line with their numbers i take it that their $9.20 valuation is still relevant

http://www.comvita.co.nz/_assets/Investors/Research/20151117Edison,ComvitaReport,Nov2015.pdf

[ratkin]

Edison research hasn't been updated since November (after H1 results) but seeing FY March was in line with their numbers i take it that their $9.20 valuation is still relevant

http://www.comvita.co.nz/_assets/Investors/Research/20151117Edison,ComvitaReport,Nov2015.pdf

Many on this thread are expecting too much from Comvita. They spent years ticking over around the Three to Four dollar mark quietly doing a great job. Suddenly the herd noticed and the price rocketed up very fast, all the way to Twelve dollars. Great little company but it was one extreme to the other. Valuation likely lies somewhere in between

[winner69]

Still 100% plus up from a year ago ...not too bad

[Beagle]

FY17 forecast PE only 21 for a company growing at 68% last year. Management are very confident of doubling sales by 2020 and with the company gaining ever increasing economies of scale and efficiency as the company grows I expect profit growth over the next four years to significantly outstrip the doubling in sales. Profit could triple over the next 4-5 years. Share split with only 39m shares on issue is likely at some stage. Outstanding growth opportunity in my opinion. (Disc: Hold, DYOR not to be considered a recommendation or professional advice).

You must have missed this post Winner. Profit grew 68% last year and they're currently trading on a PE of under 19 times forecast FY17 earnings. Profit grew 68%, (more than double the sales growth rate) on 32% increase in sales so the business model is clearly scalable and clearly isn't broken, (anything but). A simple extrapolation of last year's numbers would indicate that if sales can double within 4 years profits could quadruple ! This in a company trading on a multiple less than the NZX50 average... Hmmm...

[Red Bus]

Yes the basics are still appealing,Sea Dragon is a concern but as Roger has earlier pointed out the convertible loans amount to but 7.5CPS ,the weakness may be overdone.
Share Price should benefit in December when MPI are scheduled to release their 'Robust ,science based definition for mono-floral honey"which will further enhance the value of compliant Manuka Honey. MPI have been toiling away on this with Comvita input since December 2014. It is a big deal in the manuka honey world which is riddled with non genuine and counterfeit product.
CVT to the best of my knowledge remains the only Manuka honey play available on the NZX when the genuine product is subject to MPI certification it will assume an even stronger premium and CVT will benefit.

[Beagle]

Yes the basics are still appealing,Sea Dragon is a concern but as Roger has earlier pointed out the convertible loans amount to but 7.5CPS ,the weakness may be overdone.
Share Price should benefit in December when MPI are scheduled to release their 'Robust ,science based definition for mono-floral honey"which will further enhance the value of compliant Manuka Honey. MPI have been toiling away on this with Comvita input since December 2014. It is a big deal in the manuka honey world which is riddled with non genuine and counterfeit product.
CVT to the best of my knowledge remains the only Manuka honey play available on the NZX when the genuine product is subject to MPI certification it will assume an even stronger premium and CVT will benefit.

Nice post, welcome to the forum.

[stoploss]

I hope this will help reverse some of the colony loss globally ...

https://www.theguardian.com/environment/2016/jul/27/leading-insecticide-cuts-bee-sperm-by-almost-40-per-cent-study-shows?CMP=Share_iOSApp_Other

[winner69]

How long does raw honey (before processed into finished stock) last?

Comvita had $54m worth as at March

Just seems an awful lot - even more than at last September when they said they had purposely built up stock .....so still building a stock pile?

[BlackPeter]

How long does raw honey (before processed into finished stock) last?

Comvita had $54m worth as at March

Just seems an awful lot - even more than at last September when they said they had purposely built up stock .....so still building a stock pile?

I understand that they find in the Egyptian pyramids sometimes honey which the ancient Egyptians gave their pharaos on their way into afterlife. I understand that the honey survived the travel through the millennia much better than the pharaos. Actually - it is still (after 3 or so thousand years) good for human consumption. Given that, I wouldn't worry too much about raw-honey going off.

[kura]

Have a dim recollection of being told that the longer you store Manuka honey, that the higher (& more valuable) the UMF factor

With regards to theft of hives etc, you will be interested to know, that several years ago, as part of rehabilitating our young inmates on central north island prison farms, that they were trained in the art of bee keeping, in the hope of gainfully using this talent on their eventual release.

Yep they obviously adapted this talent for their own gain. ( The law of unintended consequences )

[Harley]

Honey never goes off.

[emveha]

Have a dim recollection of being told that the longer you store Manuka honey, that the higher (& more valuable) the UMF factor

With regards to theft of hives etc, you will be interested to know, that several years ago, as part of rehabilitating our young inmates on central north island prison farms, that they were trained in the art of bee keeping, in the hope of gainfully using this talent on their eventual release.

Yep they obviously adapted this talent for their own gain. ( The law of unintended consequences )

And obviously you have proof of what you are saying.

[reacher]

And obviously you have proof of what you are saying.

Obviously.

[kiwidollabill]

And obviously you have proof of what you are saying.

100% correct.... http://www.analytica.co.nz/Tests/Honey-Testing/Forecast-MG-NPA-HMF

Years ago, before this was scientifically verified, a number of packers realised this from their own observations which created a arbitrage opportunity when procuring drums of manuka. They could buy honey off the beekeeper at a certain UMF level for $, knowing that in ~12 months time it would be worth much more. The partys all over now...

[jonu]

Honey never goes off.

Yes it does. It can ferment and degrade. Also UMF will increase when stored in warm conditions but peaks after a while and then diminishes. When "growing" it you have to be careful about the temp you store it at, as there are ways to measure likely growth peak and subsequent degradation.


Discl: Have industry experience

[emveha]

100% correct.... http://www.analytica.co.nz/Tests/Honey-Testing/Forecast-MG-NPA-HMF

Years ago, before this was scientifically verified, a number of packers realised this from their own observations which created a arbitrage opportunity when procuring drums of manuka. They could buy honey off the beekeeper at a certain UMF level for $, knowing that in ~12 months time it would be worth much more. The partys all over now...

I'm sorry, I seem to have created a misunderstanding. My request for proof was about the fact that hive thefts are made by ex-convicts who did beekeeping as part of their rehabilitation program.

I didn't know about the UMF growth, that is very interesting.

[Baa_Baa]

They've hitched their wagon to Sea Dragon, I think that should give shareholders cause for thought. It could be big, or bust. Factor that in to your analysis.

[winner69]

All this UMF talk

I had to google what UMF was - you learn something everyday

As a consumer I've often buy Manuka Honey and haver ever noticed any UMFs on the container but then I never have really looked. If the container says Manuka it must be manuka,

The Arataki tub in the cupboard says UMF 5+ Active - according to the scale that's not very good at all (low levels one website says). Maybe the active makes up for it? At $30 for 500gms I feel ripped off big time

A BIT LATER - I see the Comvita table honey is a blend with a UMF 5+. On line 35.50

Maybe 5+ is as good as it gets for putting on toast

[Harley]

Yes it does. It can ferment and degrade. Also UMF will increase when stored in warm conditions but peaks after a while and then diminishes. When "growing" it you have to be careful about the temp you store it at, as there are ways to measure likely growth peak and subsequent degradation.


Discl: Have industry experience

On no purchased NZ Manuka honey product will you find a "best buy" or "use by date" and fermented honey sounds like it would taste awesome.

[Beagle]

They've hitched their wagon to Sea Dragon, I think that should give shareholders cause for thought. It could be big, or bust. Factor that in to your analysis.

Their most recent investment represents 7.5 cps of CVT value and that after Sea Dragon spending over $10m on the omega3 facility. Chump change for a company of CVT's size.

[jonu]

On no purchased NZ Manuka honey product will you find a "best buy" or "use by date" and fermented honey sounds like it would taste awesome.

If you say so. I stand by my earlier comment.

[IAK]

CVT down about 15% in the last month while NZX50 up over 7% OUCH !!

Bargain or something wrong ?


Maybe someone got spooked and decided to sell down? "China tax hits kiwi firms". Comvita and Trilogy mentioned.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11683336



Discl. holding

[Beagle]

Maybe someone got spooked and decided to sell down? "China tax hits kiwi firms". Comvita and Trilogy mentioned.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11683336



Discl. holding

Nice that Comvita confirmed no effect, (bottom of article). Looks like all the scared cats have exited and we're back to letting the good times roll :t_up:

[kiwi_on_OE]

On no purchased NZ Manuka honey product will you find a "best buy" or "use by date" and fermented honey sounds like it would taste awesome.

Mead may be what you are thinking of/hoping for.

[kura]

Mead may be what you are thinking of/hoping for.

I recall making Mead once, ( Back in the day when local beekeeper paid me bee-site rental in honey ) Must have attracted every bee for miles, when I heated honey prior to fermenting it !

[babymonster]

CZZ on asx sold its share of the JV to CVT, how come it's not announced on nzx?

[babymonster]

CZZ on asx sold its share of the JV to CVT, how come it's not announced on nzx?
My bad, it's going to form a JV with CVT

[IAK]

Article in today's herald on manuka honey. The good news... Manuka honey’s potential to defeat a scary superbug may give it another competitive advantage, but the bad news ......the varroa mite is becoming less sensitive to chemical miticides therefore the bee population may continue to decline.

http://www.nzherald.co.nz/technology/news/article.cfm?c_id=5&objectid=11688105



Disc. Holding

[babymonster]

honey is not the favour anymore? heh

[JayRiggs]

This gentleman is unhappy about Comvita.
http://www.stuff.co.nz/business/farming/83059105/bitter-taste-in-honey-suppliers-mouth

[BlackPeter]

This gentleman is unhappy about Comvita.
http://www.stuff.co.nz/business/farming/83059105/bitter-taste-in-honey-suppliers-mouth

Obviously - it would be good to hear as well from other Comvita suppliers, but at face value it appears the company has at least some growing pain. Irregularities as described, if true are clearly not good for business.

[winner69]

Just another version of old news ...or somethig new?

http://www.stuff.co.nz/business/farming/83372041/manuka-honey-industry-comes-under-british-media-spotlight

As a consumer i reckon manuka honey to put on your toast is just one big rip off. As the article says just buy a bog standard bush honey and save heaps.

Mind you i'm told the faceccream is pretty good value.

[Joshuatree]

Yeah its always been the worst taste wise; it used to be the least valued honey.Food Manufacturers would buy it in bulk because it was by far the cheapest and blend it in to mask the strong slightly unpleasant flavour.

[Ogg]

Just another version of old news ...or somethig new?

just buy a bog standard bush honey and save heaps.



Yep, I've been doing that for a few years now.

All Manuka honey has the active ingredient. The "tested stuff" just has a guarantee that it has a certain level.

However, it's industry standard to test an entire batch once, and then label everything. If the results come back low, then they just retest it on another sample until it passes.

What's interesting is that you can actually pay and get a test done yourself at a lab (do a google search). I've done it once, (it's under $100). I bought a third party brand on trademe. This guy was an independent producer who claimed his stuff was really high. I got it tested and it came back way lower. It was still "OK" but was way under what he said.

The industry is full of problems and needs regulation. The UMF and MGO standards are really just marketing gimmicks. There need to be a new standard that is recognised worldwide and independently managed. This would kill Comvita share price though.

The best thing to do is buy "untested Manuka honey", but make sure it's 100% Manuka honey. Don't buy the multiflora stuff either, that's where they blend other honey and it only contains 10% Manuka.

I've found the untested "Arataki Manuka Honey" at the supermarket the best as it's 100% Manuka honey and you're not paying sky high tested prices. It's still semi expensive but it's like playing lotto. You might get a good batch, then the next week get a bad batch. Obviously you wouldn't know but in the long term it would average out. This produces the best price to benefit ratio. Just my 2 cents.

Arataki Untested:

8244

Arataki Tested:

8245

[Sideshow Bob]

Seems like a no-brainier for the industry that they have to come up with an independent, clear scientifically based standard - for long term value for the entire industry. Otherwise it becomes who has the biggest marketing budget and promote their 'standard'. I wouldn't have thought it would be too hard, but a lot of vested interests. I guess a few must have something to hide/lose and be doing something dodgy - otherwise would be into it.

[GTM 3442]

Seems like a no-brainier for the industry that they have to come up with an independent, clear scientifically based standard - for long term value for the entire industry. Otherwise it becomes who has the biggest marketing budget and promote their 'standard'. I wouldn't have thought it would be too hard, but a lot of vested interests. I guess a few must have something to hide/lose and be doing something dodgy - otherwise would be into it.

Also a whacking great patent/trademark enforcement budget. But that might have too long a timeframe to suit New Zealand business.

[Ogg]

Seems like a no-brainier for the industry that they have to come up with an independent, clear scientifically based standard - for long term value for the entire industry. Otherwise it becomes who has the biggest marketing budget and promote their 'standard'. I wouldn't have thought it would be too hard, but a lot of vested interests. I guess a few must have something to hide/lose and be doing something dodgy - otherwise would be into it.

The problem isn't the scientific method. It's how the results are presented to the public.

It's kind of similar to the financial ratings industry, where you have Moody's, S&P and Fitch Ratings. They are all using the same method but they all represent ratings differently. For example, Aa1 vs AA+

With Manuka honey they're just measuring the non-peroxide activity. All the UMF system does is convert it to a readable number, while the MGO system measures the methylglyoxal compound but it's scientifically the same thing. The third party producers do the same test, but label their honey different, normally they say 30+, or 20+ "Active", which looks similar to the UMF standard but doesn't contain the words UMF (which is the patented part).

Comvita have done a really good job promoting their rating system that it's kind of became the defacto system. The label "UMF" has become a generic trademark. It's a similar problem that Xerox had in the 1970's when everybody started saying "Xerox" and they were in danger of losing their trademark.

Comvita have to be careful because they need to protect their IP but also balance the market and enable fair competition. What I think should happen is that Comvita should be forced to allow others to use their UMF system for a small reasonable fee. At the moment they won't allow anybody to use it. Third party producers should be able to use it for a reasonable fee that's been set by the government. This would probably hit Comvita's share price in the short term but it would be the best for the industry long term.

[jonu]

The problem isn't the scientific method. It's how the results are presented to the public.

It's kind of similar to the financial ratings industry, where you have Moody's, S&P and Fitch Ratings. They are all using the same method but they all represent ratings differently. For example, Aa1 vs AA+

With Manuka honey they're just measuring the non-peroxide activity. All the UMF system does is convert it to a readable number, while the MGO system measures the methylglyoxal compound but it's scientifically the same thing. The third party producers do the same test, but label their honey different, normally they say 30+, or 20+ "Active", which looks similar to the UMF standard but doesn't contain the words UMF (which is the patented part).

Comvita have done a really good job promoting their rating system that it's kind of became the defacto system. The label "UMF" has become a generic trademark. It's a similar problem that Xerox had in the 1970's when everybody started saying "Xerox" and they were in danger of losing their trademark.

Comvita have to be careful because they need to protect their IP but also balance the market and enable fair competition. What I think should happen is that Comvita should be forced to allow others to use their UMF system for a small reasonable fee. At the moment they won't allow anybody to use it. Third party producers should be able to use it for a reasonable fee that's been set by the government. This would probably hit Comvita's share price in the short term but it would be the best for the industry long term.

Ogg, you obviously have a fair amount of industry knowledge, yet quite a lot of what you have said in your last two posts is incorrect or similar to the misinformation that you claim to be debunking (particularly the reference to Arataki's manuka honey in post 332). It is my understanding that Comvita are very keen for everybody to use the UMF standard.

By way of disclosure I have recently become a Comvita employee after contracting to them for a number of years, but in no way am I speaking on behalf of the company.

[Ogg]

Ogg, you obviously have a fair amount of industry knowledge, yet quite a lot of what you have said in your last two posts is incorrect or similar to the misinformation that you claim to be debunking (particularly the reference to Arataki's manuka honey in post 332). It is my understanding that Comvita are very keen for everybody to use the UMF standard.

By way of disclosure I have recently become a Comvita employee after contracting to them for a number of years, but in no way am I speaking on behalf of the company.

There are some licensed UMF agents. Comvita are keen for everybody to use it at the "right price". The price is so high that most don't use it. There's nothing wrong about this as it's their right and their IP. The problem is that the general public are being mislead and don't understand the system. It's a huge competitive advantage and it's now became an antitrust issue.

I've never worked in the industry, just done alot of research online.

I don't have anything against Comvita. It's a great company...I'm just bummed I didn't buys shares at $4. :mad ;:

[jonu]

I would suggest that "most don't use it" because it suits their purposes, not because of expense. By not using UMF or the MGO scale they are angling to obtain a premium for low grade honey by fudging what it really is.

Again my views are are my own and not that of the company.

[kiwidollabill]

Ok, I have a fair amount of industry knowledge around this so I'll try and set a few things straight.

The UMF grading system is not Comvitas, it is managed by the UMFHA http://www.umf.org.nz/. Each member is charged a few k in levys a year, the majority of the honest (and some of the dishonest) players use this system.

The lion share of all manuka testing is now done via Analytica Laboratories who have pioneered (with aid of UMFHA and govt research funding) a number of validated tests to identify what 'manuka' is (c.f. Kanuka, Australian Honeybush etc) and how it can be graded. In concert with UoA they have developed the handheld device mentioned in the article. http://www.stuff.co.nz/business/industries/73006740/Detector-to-identify-fake-Manuka-honey-launched, the market for this device is not really identifying fakes, but more for production control.

So the 'industry' has been working pretty hard to get a standard established, the biggest ones at fault are MPI. When this broke https://www.mpi.govt.nz/food-safety/food-safety-for-consumers/food-recalls/evergreen-life-limited-manuka-honey-and-honey-products/ the Chinese CIQ gave MPI at absolute earful, there is now a real risk the Chinese will ignore any NZ based standard for Manuka honey. The most recent release about tightening up import standards are also as a direct result of this.

As for Mr Bray..... he has a vested interest in ensuring that the pollen analysis continues to incorrectly classify Kanuka honey as Manuka (since Kanuka is the majority species over the SI).

[winner69]

So all this weekend discussion is just 'noise' and won't have any effect on the CVT share price?

Life goes on and CVT will still sells heaps of product and make ever increasing profits which will result in a higher share price and bigger dividends

Results announcement tomorrow - that bee exciting

[Beagle]

So all this weekend discussion is just 'noise' and won't have any effect on the CVT share price?

Life goes on and CVT will still sells heaps of product and make ever increasing profits which will result in a higher share price and bigger dividends

Results announcement tomorrow - that bee exciting

LOL you're on your best game early this week mate. Couldn't agree more. Metrics for this fast growing company are compelling in my opinion.

[winner69]

LOL you're on your best game early this week mate. Couldn't agree more. Metrics for this fast growing company are compelling in my opinion.

Neighbour asked me when will share price get back over $12.50 (their buy price) so he and his mates down at the bowling club can feel better

I said soon - just be patient mate and don't get tempted to cut your loses again and go and chase the next sure thing. Term deposits not getting any better he reminded me.

[Beagle]

Yes, for quite some time now I've thought about having a plaque made up along the above lines in my office. A very large dose of patience an essential ingredient for most investments.

[winner69]

Yes, for quite some time now I've thought about having a plaque made up along the above lines in my office. A very large dose of patience an essential ingredient for most investments.

Yes indeed

But Trilogy and Scales are testing my patience at the moment

[Ogg]

Ok, I have a fair amount of industry knowledge around this so I'll try and set a few things straight.

The UMF grading system is not Comvitas, it is managed by the UMFHA http://www.umf.org.nz/. Each member is charged a few k in levys a year, the majority of the honest (and some of the dishonest) players use this system.

The lion share of all manuka testing is now done via Analytica Laboratories who have pioneered (with aid of UMFHA and govt research funding) a number of validated tests to identify what 'manuka' is (c.f. Kanuka, Australian Honeybush etc) and how it can be graded. In concert with UoA they have developed the handheld device mentioned in the article. http://www.stuff.co.nz/business/industries/73006740/Detector-to-identify-fake-Manuka-honey-launched, the market for this device is not really identifying fakes, but more for production control.

So the 'industry' has been working pretty hard to get a standard established, the biggest ones at fault are MPI. When this broke https://www.mpi.govt.nz/food-safety/food-safety-for-consumers/food-recalls/evergreen-life-limited-manuka-honey-and-honey-products/ the Chinese CIQ gave MPI at absolute earful, there is now a real risk the Chinese will ignore any NZ based standard for Manuka honey. The most recent release about tightening up import standards are also as a direct result of this.

As for Mr Bray..... he has a vested interest in ensuring that the pollen analysis continues to incorrectly classify Kanuka honey as Manuka (since Kanuka is the majority species over the SI).

The UMFHA is run like a cartel. It's a private organisation designed to protect the global monopoly. Comvita are like the Godfather controlling everything as they provide most of the funding. They pretty much own it.

It's like giving a private organisation the power to issue food safety certificates to restaurants and bars. Just imagine having Mcdonald's setting the food safety standards in New Zealand. Of course this is going to disenfranchises others and is open to dishonesty to maximum the profit and eliminate the competition.

This is what happens when a commodity all of a sudden becomes valuable. Just like Standard Oil in the early 20th century, Comvita have vertically integrated the system, along with the regulatory framework and legislative oversight. The current National Government will most likely support them because they create jobs which fuel their political agenda. If New Zealand was a third world country, Comvita would have been nationalised by now.

These are all rumours and gossip, but when you join the dots it's easy to see a system that's open to corruption and needs regulation.

The share price is headed to $20+ over the next year IMO. The only thing that can stop this behemoth is the government.

[winner69]

The share price is headed to $20+ over the next year IMO. The only thing that can stop this behemoth is the government.

Jeez $20 plus

Roger and others will like that

[Beagle]

We're going to need a share split, say 10:1 :)

[Ogg]

We're going to need a share split, say 10:1 :)

I got in today at 10.59.

Regardless of weather the industry gets regulated it's going to head higher.

I'm hoping for a solid report tomorrow and more hedge funds should enter and push it higher.

A 10:1 split and a dual listing on the ASX would be nice.

Good luck to everyone.

[babymonster]

it's out...had a quick look.. profit is very good.. debt could be an issue..

[Beagle]

Solid result, gearing up for GROWTH !! :t_up:

[winner69]

Gee - couldn't help noticing that between March and June raw material inventory is up ~$11m and debt is up ~$25m

Stocking and gearing up for growth they sure are

The bowling club guys will be happy with the bigger dividend

[winner69]

How the hell can they burn through $50m of cash in 15 months? Even operating cash flow was negative $32m

Almost xero-esque proportions

[Beagle]

How the hell can they burn through $50m of cash in 15 months? Even operating cash flow was negative $32m

Almost xero-esque proportions

Inventory jumped from $44m to $95m a $51m increase. They're now well positioned to supply, they didn't use to bee.

[RupertBear]

And down she goes! :(

[King1212]

I remembered broker suggested to get in around $12 ish...

Is it the right time to buy?? what u guys think?

[ShouldHaveHeld]

I have bought (some more)

[Ogg]

I remembered broker suggested to get in around $12 ish...

Is it the right time to buy?? what u guys think?

Yeah, it's looking sick but VWAP is $10.591. Uneven trading.

I'm just gonna hold.

[winner69]

I remembered broker suggested to get in around $12 ish...

Is it the right time to buy?? what u guys think?

More important - what YOU think king

[whatsup]

I remembered broker suggested to get in around $12 ish...

Is it the right time to buy?? what u guys think?

Not yet , could be sub $ 10 soon !!

[King1212]

uhmmm..quiet pricey eh..consider USA presidential race in 8 weeks to go....

[G on]

Could also be response about an article that manuka honey a scam recently. From UK? Didn't pay much attention to it.

[Balance]

How the hell can they burn through $50m of cash in 15 months? Even operating cash flow was negative $32m

Almost xero-esque proportions

Trading on rather high multiples (24 times historical) now with uncertainty in China market?

[whatsup]

Not yet , could be sub $ 10 soon !!

Keep your powder dry !! sub $10.00 very close , and the bottom is ......... ?

[Ogg]

I bet it will finish green for the day :D

[Beagle]

Trading on rather high multiples (24 times historical) now with uncertainty in China market?

Have you checked the EPS growth rate ?

[ratkin]

Great company but people have been paying silly money to buy it. Share price got way ahead of itself, not surprising it is showing weakness

[Ogg]

Great company but people have been paying silly money to buy it. Share price got way ahead of itself, not surprising it is showing weakness

Pretty much sums up the global economy.

[trader_jackson]

I was interested in CVT due to the growth & story behind it

2014 revenue up 11%, inventory up 35%, positive operating cash flows
2015 revenue up 32%, inventory up 65%, positive operating cash flows
2016 revenue up 32%, inventory up 114%, negative operating cash flows, and debt up substantially

hmm... all for the great growth opportunities, right?

[Balance]

Have you checked the EPS growth rate ?

My concern really pertains to the cautionary note by CVT on China - points to something deeper as downgrades come in threes.

[Ghost Monkey]

uh-oh W69, you may need to invest in a disguise to sneak past your bowling buddies when they're out mowing their lawns :scared:

[Beagle]

Okay on a deeper look it appears there may be some growing pains.
Debt blowing out the way it has is a concern in tandem with other matters, see below.
Stock has blown out from $44.5m, (6.6 months cost of sales in 2015 which is a stock turn of less than 2) to $95.2M or a little disturbing 10.1 months cost of sales as at 30 June 2016.

After a Herald report some time back where the CEO was reported as saying sales were not being affected by Chinese authorities regulatory changes, its now clear they are.
EBITDA margin's have contracted from a healthy 18% as at 31 March 2016 to 17.1% as at 30 June 2016, quite a drop for adding on only 3 months of quiet season sales.

Sales for the current quarter were only $28.6m and EBITDA margin on those modest sales was only 10.6%. I guess you expect that when sales overall are quieter for this quarter but nonetheless it is a little disconcerting looking at that quarter in isolation. This in tandem with stock blowing out dramatically suggests management were "behind the curve" with their earlier comments on the Chinese situation. Why ? Reports of some suppliers being disenfranchised by administrative shortcomings could possibly have some substance to them if management can't even ascertain at the time that the Chinese situation is affecting them ?

The stock turn is now very poor and quite a contrast to other retailers, (acknowledge CVT is more than a retailer), like Briscoes or HLG -possibly a little disingenuous for me to compare to other box retailers but nonetheless its makes quite a stark contrast. The sea dragon thing is thorn in their side, albeit something that has potential and only worth about 7.5 cps.

After a huge run I think the market will need to see evidence that growth isn't going to be impacted much by the Chinese situation and see them improve their stock turn before we see the SP reestablish an upward trajectory. They also need to fix the fiasco that is Sea Dragon. Plenty of work for management to do. Disc: I have reduced my stake and expect a period of consolidation around current level's.
Lack of a share split disappointed me. P.S. Very strong $Kiwi won't help FY17.

[Balance]

uh-oh W69, you may need to invest in a disguise to sneak past your bowling buddies when they're out mowing their lawns :scared:

Still unquestionably still one of the great NZ stories - question of what price you pay for that story.

The high inventory can be partly explained by : "at a period of peak supply, as most of our externally sourced raw honey is received between March and June".

[winner69]

uh-oh W69, you may need to invest in a disguise to sneak past your bowling buddies when they're out mowing their lawns :scared:

No worries mate

He happy with dividend and were even happier when I told him that OGG reckons CVT is a $20 share. I said this OGG was a professional investor and knew heaps about CVT

Patience

[winner69]

$10 is a nice round number so technically probably will provide solid support for the share price

Question - what 12 month profit you guys using to assess the EPS and PE (seeing the reported 45 cents is for 15 months)

[Ghost Monkey]

Roger 9:47am "Solid result, gearing up for GROWTH !! :t_up:"

Roger 12:27pm "Okay on a deeper look it appears there may be some growing pains."


Just like weather watching in Auckland.

[Ghost Monkey]

No worries mate

He happy with dividend and were even happier when I told him that OGG reckons CVT is a $20 share. I said this OGG was a professional investor and knew heaps about CVT

Patience


Oh, well, that's ok then. I was under the impression he wasn't so patient and was worried for your safety.

$20 seems a bit further off today but agreed, patience is the best strategy.

[jim9358]

Hi All, a newbie here! Friend Zouga referred me to ya' all. Have been an NZX dabbler for a very long time including only recently in Comvita a co. have known for a very long time from when I was a young rower and would bike out to Paengaroa to buy bags of bee-pollen to add to fuel of a 6K calorie a day diet! As others here say it is a amazing story with Claude on bee-pollen too nearing 103! When I visited here several weeks ago with in mind to judge views before taking out a significant holding relative to myself I was quite concerned with views here. So I emailed and had both email and phone correspondence with Scott Coulter. Like others here a concern was their holding in Seadragon with more for me the ethics of being involved with the NZ fishing industry and destructive to marine ecology by bottom trawling and targeting of shark. He advised that they immediately advised Seadragon they were not comfortable at all with shark fishing for Omega-2 resulting in pressure now removed from that fishery, to now concentrate on Omega-3 alone. Scott said that they are steadfastly orientated to the ethics in business that the company first started with from the days of Claude and Allan from 1974.. They do (from memory) 97% recycling. My impression was that the plan is very good: Plans cost money (refreshing stores; securing suppliers)! The 15 month statement today supports that: Seadragon is just a small component, a small plan, of a wider intention of broader diversification to even out the sine wave of sales in the annual cycle. China requiring registration etc plays into hands of large incumbents which is what Comvita is, they will win greatly from this Chinese regulation! Disclosure: After talking to Scott I bought my 2nd biggest purchase in 15 years! Yep, I believe those saying "20" are correct! I just love this Kiwi company.

[Beagle]

Roger 9:47am "Solid result, gearing up for GROWTH !! :t_up:"

Roger 12:27pm "Okay on a deeper look it appears there may be some growing pains."


Just like weather watching in Auckland.

I know its hard to believe that some of us are in business and have a lot of time pressure on us and don't have a lot of time at certain times of the day. When time allowed I had a deeper look at the issues. It is a solid result but there are growing pains, the two statements are not mutually exclusive :rolleyes: DYOR

[Balance]

I know its hard to believe that some of us are in business and have a lot of time pressure on us and don't have a lot of time at certain times of the day. When time allowed I had a deeper look at the issues. It is a solid result but there are growing pains, the two statements are not mutually exclusive :rolleyes: DYOR

Takes a big person with solid experience and objectivity to acknowledge first look is different from a proper look.

Bit like seeing a sheila with heavy make-up in an Oz pub at 3 am and then, looking at her again at 7 am when the sun is up? :D

CVT is a great company and has delivered solidly for the last 2 years after a flat 3 year period before that.

I suspect the market is going to be monitoring the company very closely to see if the company is experiencing another flat period of growing pains.

[winner69]

Looking at the chart again that $10 mark has been a telling mark in the past. acted as resistance for some time before bursting through ...... now should as act as a very strong support level

Its even below the 200MA but what the heck I'm in to see what happens - with a pretty tight stop loss. OK I know i should wait until the crisis is over but now is as good as ever I reckon

[Beagle]

Looking at the chart again that $10 mark has been a telling mark in the past. acted as resistance for some time before bursting through ...... now should as act as a very strong support level

Its even below the 200MA but what the heck I'm in to see what happens - with a pretty tight stop loss. OK I know i should wait until the crisis is over but now is as good as ever I reckon

Better not answer the phone, it'll be KW calling telling you off for ignoring her TA advice :)

[winner69]

Better not answer the phone, it'll be KW calling telling you off for ignoring her TA advice :)

I know .....even Hoop will be telling me off ......but 1000 is such a strong round number it'll support the share price. I just love round numbers like this ......better than numbers like 300 eh

But i bee very careful here - tight stop loss lo keep me getting stung

[Beagle]

Yes a sweet company that's also on a journey that's just bee gun but one is wise to put in place a strategy that avoids getting stung :)

[winner69]

Yes a sweet company that's also on a journey that's just bee gun but one is wise to put in place a strategy that avoids getting stung :)

Purely a trade and of course I'm only for the dividend and not to make a profit per se - but an interesting company

Can't get my head around the financials though -especially the cash flows. I have only looked at 2013 onwards and note the following -


Each of the last 4 years free cash flows (excluding acquisition costs but including PPE etc) have been negative
These negative cash flows total $62m
In addition they have spent $24m on acquisitions / investments (Sea Dragon etc)
But in spite of negative cash flows in the same period they have paid out $22m in dividends




All funded by increased debt of $58m (from 2013) and new capital of $44m

Suppose they know what they are doing but cash flows over 4 years of $86m (and paying out $22m in dividends as well) seems an awful lot.

How long will such spend continue? Hard to do any DCF valuation on this.

[Beagle]

Seems to have worked okay for Xero. Can't grow strongly without some cash burn. Yes they've raised equity and debt but they've also entered into new JV's and made substantial investments in infrastructure, supply, senior personnel, research and development and have ample stock to grow, (stock shortages have been an issue at times in previous years).

Main thing is sales and EPS growth, if they can keep that going and turn all that stock into cash they'll be fine in my opinion but I do think the market will need to see evidence that the situation in China isn't affecting them materially. The flip flop of saying we're not affected and then admitting only a few weeks later we are didn't impress. They now talk about new strategies in China to mitigate the effects of the Chinese regulatory situation...I don't want to hear about attempts to mitigate sales declines I want to hear about GROWTH ! Hounds by their nature are impatient creatures.

Best stay away from the bowls club for a while mate.

[winner69]

Not many punters wanting to give them away this afternoon - need to see what happens tomorrow morning

Else might have to bump the price up -- ouch

[Beagle]

http://www.wikihow.com/Treat-a-Bee-Sting Bee careful mate, tide seems to be on the wane right at the moment. Some homework tonight for holders just in case tomorrow is another stinging day.

[ratkin]

I would be careful trading this one. Volumes have increased the last year or so as all you johny come lately types latched onto it. However at its heart it is still a very iliquid stock, any bad news and it would be very difficult to sell on witout a big jump down.

[Beagle]

Less than 4 weeks ago http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11683336 Extract
Comvita chief executive Scott Coulter also said the changes weren't affecting the company's overall sales.

Now hands up who thinks the herald accurately reports exactly what is said at all times, (sometimes in my experience), but anyway you be the judge if you think that gave a somewhat disingenuous view of whether the Chinese regulatory changes were having an effect or not.

I gathered the impression, perhaps incorrectly that there was no material change or effect on Comvita...obviously that's at a divergence to what's been said in the annual result commentary today.

On a strict interpretation what he said could be said to be technically correct, overall sales may not have been affected much because of growth in other regions but the regional sales to China obviously have been. Perhaps he could have been a little more forthcoming in what he said on 29 July ?...I am a little disappointed he wasn't.

Agree with Ratkin, volumes can be slim but would have been improved by a share split...oh well...another time perhaps.

[h2so4]

Purely a trade and of course I'm only for the dividend and not to make a profit per se - but an interesting company

Can't get my head around the financials though -especially the cash flows. I have only looked at 2013 onwards and note the following -
.

And before 2013 there were low margins and falling stock turns.
I don't like the latest set of financials.

[Fox]

Exactly my thoughts Roger whilst reading the outlook re. China concerns this morning. There seems to be a u-turn on what was said in the NZ Herald statement to what was said today in the announcement. Correct me if I'm wrong, but "not affecting the company's overall sales" is not at all the same as emergence of "uncertainty in the re-export market distribution channels". This extra doubt/risk is then said to be "reduced" through redirection of productions through alternative distribution channels. Pretty conflicting statements that have a lot of room for interpretation eh.

Any new regulations disrupting existing supply channels would surely have a negative impact on margins as channels would have to be reworked whilst demand and supply issues would drop off in the short-term due to any potential tax or issues in China. Also this reduction in uncertainty could be interpreted as not quite 100% reduction in harm, so there may be some hinting towards a tail off in sales and our growth.

This is a growth company which is priced on a modest multiple given its track record over the past couple of years of fantastic growth. Any hinting of negative sentiment towards the demand from their biggest market, China, where ~60% of the products end up, certainly raise some alarm bells in my head. An increase in risk/uncertainty on forward growth prospects will need additional rewarding in terms of the share price returns, which is why I suspect we have seen a drop in today's price. Also not to mention the possibility of some sort of information leak in the weeks leading up to today's announcement which was relatively strong.

Disc. - sold a couple

[kiwidollabill]

^ A crapload of CVT product enters China through the grey channel and will be recorded on the statements as NZ/AUS sales. I will be very surprised if the SLT is not concerned on how future regulation may affect their overall sales or at least management of their distribution chain.

[trader_jackson]

Less than 4 weeks ago http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11683336 Extract

Now hands up who thinks the herald accurately reports exactly what is said at all times, (sometimes in my experience), but anyway you be the judge if you think that gave a somewhat disingenuous view of whether the Chinese regulatory changes were having an effect or not.

I gathered the impression, perhaps incorrectly that there was no material change or effect on Comvita...obviously that's at a divergence to what's been said in the annual result commentary today.

On a strict interpretation what he said could be said to be technically correct, overall sales may not have been affected much because of growth in other regions but the regional sales to China obviously have been. Perhaps he could have been a little more forthcoming in what he said on 29 July ?...I am a little disappointed he wasn't.

Agree with Ratkin, volumes can be slim but would have been improved by a share split...oh well...another time perhaps.

I talked to a friend about this... couldn't believe that the Comvita chief executive could turn around and make such a claim, so quickly...

For me, seemingly never ending inventory build ups (that in percentages, are consistently increasing 2-3x more than revenue increases), margin decreases, concerning cash flows, dramatic recent increase in debt, and chinese regulatory uncertainty are all important things to be considered...

However what is more alarming to me, seeing this is a growth stock, is that management seemingly don't actually know there biggest market/opportunity, china, and what is really going on... making such a direct confirmation of "no it doesn't affect us" in this nz herald article 4 weeks ago, then a 'near hidden' U turn today of "hmm maybe it does affect us, but hopefully shouldn't too much", is concerning... then the fact the share price tracked down in the days/weeks leading up to results simply doesn't help...it would appear some not-so-sweet honey leaked out early

Good luck to the holders, but I will be waiting till they can confirm they understand their key opportunity/market, they stop increasing inventory dramatically more than revenue growth, show they can keep debt under control, and get back to at least operating cash flow positive

Disclosure: was very tempted, and expected/hoped to see pretty good results, instead got shocked left, right and centre

[Baa_Baa]

It's a brave bobby that buys a confirmed downtrend, this trusty weekly chart said "get out" the week ending July 15 and confirmed quickly afterwards, week ending July 22nd.

But it's been a heck of a good run prior so understandable that some (many?) will be sitting on big capital profits, reluctant to cut paper gains. The bounce failed three times (weekly basis) at the rising trend line support (now resistance). Todays fail at $10 support is a bad look. The indicators (not shown) are all over-sold already, but that's no guarantee of a turnaround, moreso the seller/buyer tension in the market.

Tight stops for the brave, save them from becoming the foolhardy. It could easily go lower on current sentiment, be nimble, next buyer support is about $8.23. Have a plan either way, just in case it bounces here.

8249

Jmo, a TA perspective.

[Ghost Monkey]

I know its hard to believe that some of us are in business and have a lot of time pressure on us and don't have a lot of time at certain times of the day. When time allowed I had a deeper look at the issues. It is a solid result but there are growing pains, the two statements are not mutually exclusive :rolleyes: DYOR


On the same boat. If only we all had as much time as winner eh? But I just can't help myself with regard to some of your posts, the sales pitch is just too much. You've been banging the strong growth (actually I think it was "sensational growth" mentioned a few months back) as well as share splits, first 10:1, then 5:1, on this one for months. Perhaps you should sprinkle some risk assessment over your honey and apples first before taking a bite? You need a bit of balance, like Balance eh?

Comvita has some great products and I still like their long term prospects but a healthy dose of caution is warranted.

Regulatory risk, not really a hell of a lot of research to back up some of the sensational claims made by sellers of manuka honey and the fact that everyone left right and centre seems to be jumping on the manuka honey wagon to riches at the moment, makes me wonder how this will all unfold. Jeez, I thought Comvita was expensive until I saw this lot.
umf-24-raw-manuka-honey-steens-250g-nz785u-front-900x900.jpg (https://nz.steenshoney.com/image/cache/catalog/en/products-new/umf-24-250g-nz/umf-24-raw-manuka-honey-steens-250g-nz785u-front-900x900.jpg)

Who in their right mind would pay for this????? Tulips anyone?

I don't buy the stuff anyone. Too expensive for too little benefit. Plenty of other good alternatives.

But all that aside, if China is really the driving force behind the sp over the last couple years, as it seems, whether through direct or indirect sales, then I'll be staying firmly on the sidelines. Things will get a lot worse when China goes 'kaboom'. I'll check back in after that.

I'm afraid Winner's bowling mates won't like my views though.......oops.

[horus1]

I am along term holder. They went to high when they went into a higher index. I will be adding to shareholding at these prices.have a fair ew shares. Good products ,that work and good company.

[winner69]

All this talk about the difficulty China might or not be putting up restrict access doesn't seem to be affecting the A2 Milk share price of late

[RGR367]

..............

Jeez, I thought Comvita was expensive until I saw this lot.
umf-24-raw-manuka-honey-steens-250g-nz785u-front-900x900.jpg (https://nz.steenshoney.com/image/cache/catalog/en/products-new/umf-24-250g-nz/umf-24-raw-manuka-honey-steens-250g-nz785u-front-900x900.jpg)

Who in their right mind would pay for this????? Tulips anyone?



Never seen it and since you haven't included the price I cannot really say whether that is really expensive compared to those made by CVT. But once I observed an asian lady getting all those CVT honey on the shelves at Pak N Save Porirua. All of more than 50 bottles straight to her trolley and she's still looking for more. And at more than $34 a pop then if I'm not mistaken, I say that's some big money for CVT. She was probably one of those "daigou" completing an order.

disc: not a shareholder and still reconsidering now if I ever want to become a holder after the report

[Ghost Monkey]

oops, sorry, you're right, I copied and posted the wrong link..my bad.:p

https://nz.steenshoney.com/steens-raw-manuka-honey-umf-24-cold-pressed-250g-nz785u

$385.99 for 250g. The market for this stuff has gone nuts and I wouldn't be surprised by a bit of a backlash. In fact the Herald the morning has expanded on recent claims of 'fake' product in the UK. From consumers point of view this is bad. God knows what is showing up in China.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11699668

[winner69]

Common sense prevailed (thanks ratkin and baabaa and hoop didn't email e)

Cancelled the rest of the order - will wait for sanity to return and then reassess

Now what to do with the few i got yesterday - stop loss is 950

[percy]

Common sense prevailed (thanks ratkin and baabaa and hoop didn't email e)

Cancelled the rest of the order - will wait for sanity to return and then reassess

Now what to do with the few i got yesterday - stop loss is 950

You may have brought some of mine.!!!
Was selling a few "free" ones yesterday.!!...lol.

[Balance]

Common sense prevailed (thanks ratkin and baabaa and hoop didn't email e)

Cancelled the rest of the order - will wait for sanity to return and then reassess

Now what to do with the few i got yesterday - stop loss is 950

There will be a time to invest in CVT but best to wait for the dust to clear - fund managers do not take kindly to being 'misled' and some of them have a philosophy to liquidate if they feel they have been misled. Especially if they are still sitting on huge capital gains.

CVT is still up on where it was at the beginning of the year, and way up (>100%) on where it was 2 years ago.

I would wait for the PE contraction to stabilize now that the stock is past its PE expansion phase in sp.

[jim9358]

You guys finished with your negativity and selling? Just asking as am in for more, wondering if we have a bottom yet as seems stalled at offers 9.65 and 9.8 ;-) ...9.7 v 9.75 ...9.7 v 9.7

[RupertBear]

Craigs Investment rates it today as a BUY with TP $13.00

[jim9358]

At last someone positive LOL ;)

[Balance]

You guys finished with your negativity and selling? Just asking as am in for more, wondering if we have a bottom yet as seems stalled at offers 9.65 and 9.8 ;-) ...9.7 v 9.75 ...9.7 v 9.7

In which case you should be encouraging more negativity and selling. Get the shares cheaper!

[ShouldHaveHeld]

You guys finished with your negativity and selling? Just asking as am in for more, wondering if we have a bottom yet as seems stalled at offers 9.65 and 9.8 ;-) ...9.7 v 9.75 ...9.7 v 9.7

Sometimes the negativity and selling can help others who are looking to buy for the future :)

[jim9358]

In which case you should be encouraging more negativity and selling. Get the shares cheaper!

True that! ;)

[jim9358]

Craigs Investment rates it today as a BUY with TP $13.00

so from where it is today Craigs sees + 35% ! Nice!

[Balance]

so from where it is today Craigs sees + 35% ! Nice!

Just remember that Craigs is house broker (or as the industry calls it, house poodle) to Comvita. Big big gain of salt and swallow of vinegar first before swallowing their valuation!

Bit like house broker to Feltex Forsyth Barr thinking that Feltex was actually worth something a few weeks before it went broke! Ouch!

DYOR.

BTW - not implying CVT is a Feltex! Just using an extreme example of what house poodles do to retain the corporate client for more fees etc.

[jim9358]

Just remember that Craigs is house broker (or as the industry calls it, house poodle) to Comvita. Big big gain of salt and swallow of vinegar first before swallowing their valuation!

Bit like house broker to Feltex Forsyth Barr thinking that Feltex was actually worth something a few weeks before it went broke! Ouch!

DYOR.

BTW - not implying CVT is a Feltex! Just using an extreme example of what house poodles do to retain the corporate client for more fees etc.

Crikey! Re DYOR ...as mentioned got into nitty gritty with Scott Coulter by email and on ph couple weeks ago. Think some guys here could make the sun rising a bad thing! But can only wait and see if sun will rise again in the morning ;-)

[Balance]

Crikey! Re DYOR ...as mentioned got into nitty gritty with Scott Coulter by email and on ph couple weeks ago. Think some guys here could make the sun rising a bad thing! But can only wait and see if sun will rise again in the morning ;-)

Don't fall into the trap of wanting to read only what you want! Nobody questions that CVT is a great company and a kiwi success story which nearly was taken over a few years ago.

It all comes down to what is a fair price to pay for a great company. Following a house poodle is not a good way to determine the fair price.

[jim9358]

Don't fall into the trap of wanting to read only what you want! Nobody questions that CVT is a great company and a kiwi success story which nearly was taken over a few years ago.

It all comes down to what is a fair price to pay for a great company. Following a house poodle is not a good way to determine the fair price.

Cheers, but not follower of poodle: The "13" comment was another poster here: Don't just read about it: Scott is CEO of CVT who I talked to directly to clarify / understand some things before buying.

[Beagle]

Exactly my thoughts Roger whilst reading the outlook re. China concerns this morning. There seems to be a u-turn on what was said in the NZ Herald statement to what was said today in the announcement. Correct me if I'm wrong, but "not affecting the company's overall sales" is not at all the same as emergence of "uncertainty in the re-export market distribution channels". This extra doubt/risk is then said to be "reduced" through redirection of productions through alternative distribution channels. Pretty conflicting statements that have a lot of room for interpretation eh.

Any new regulations disrupting existing supply channels would surely have a negative impact on margins as channels would have to be reworked whilst demand and supply issues would drop off in the short-term due to any potential tax or issues in China. Also this reduction in uncertainty could be interpreted as not quite 100% reduction in harm, so there may be some hinting towards a tail off in sales and our growth.

This is a growth company which is priced on a modest multiple given its track record over the past couple of years of fantastic growth. Any hinting of negative sentiment towards the demand from their biggest market, China, where ~60% of the products end up, certainly raise some alarm bells in my head. An increase in risk/uncertainty on forward growth prospects will need additional rewarding in terms of the share price returns, which is why I suspect we have seen a drop in today's price. Also not to mention the possibility of some sort of information leak in the weeks leading up to today's announcement which was relatively strong.

Disc. - sold a couple

Excellent post and agree 100%, (you should post more often). At the least what he is reported as saying was "unfortunate". I have extremely limited experience dealing with the media but they don't always report what you want them to say but then again with no media training I know enough to chose my words very very carefully. Responding to a reporter in the context of the Chinese regulatory change I think the CEO could have done a far better job or articulating the effect more accurately.

Technically what he said may be correct in that overall sales are not being affected but the impression that came across whether intended or not is in a regional sense we're not being affected, which we now know is clearly not the case.

It gives the impression of a flip-flop and confidence is unsurprisingly affected. I am not surprised to see the SP down again today. I think its hard to see it making significant progress until further clarity on the main issue is forthcoming.

[Ogg]

here comes the bounce

[Marilyn Munroe]

Just remember that Craigs is house broker (or as the industry calls it, house poodle) to Comvita. Big big gain of salt and swallow of vinegar first before swallowing their valuation!


Yeu didn't let Balances advice go without fully understanding what he was trying to tell you did you? If so go back and read it again.

The house broker probably makes more providing market services to a corporate client than they do brokering trades in a particular share. As rational actors they are going follow the money. They are going to avoid trash talking or negativity towards a corporate clients shares as this will result in angy telephone calls from the management and loss of business to another broker.

Boop boop de do
Marilyn

[Beagle]

Don't fall into the trap of wanting to read only what you want! Nobody questions that CVT is a great company and a kiwi success story which nearly was taken over a few years ago.

It all comes down to what is a fair price to pay for a great company. Following a house poodle is not a good way to determine the fair price.

The PE is very reasonable given average growth to date but the size of the elephant in the room and its impact on future growth is almost impossible to value at this point in my view, not helped by the fact that the CEO seems to have been behind the ball in terms of understand the elephant's significance. That they are now spending serious money on other distribution channels to "mitigate" the effects in my view gives an important hint as to the materiality of the issue going forward. A real shame they weren't more forthcoming four weeks ago. I am certain there are plenty of other shareholders underwhelmed with his original somewhat inarticulate repose. I expect insto's to vote with their feet for a while.

[trader_jackson]

[QUOTE=Roger;633839A real shame they weren't more forthcoming four weeks ago. I am certain there are plenty of other shareholders underwhelmed with his original somewhat inarticulate repose. I expect insto's to vote with their feet for a while.[/QUOTE]

As I mentioned earlier, lets hope this is an "isolated management issue" (and the 8 week payment issue mentioned by another poster on Stuff is also an "isolated management issue")... and doesn't paint more disturbing/questioning issues of management and how the handle things going forward...

[winner69]

How can punters not think this is a $15 or $20 share with charts like this

[trader_jackson]

How can punters not think this is a $15 or $20 share with charts like this

Can you break out the debt and cash flow charts as well?

[Beagle]

How can punters not think this is a $15 or $20 share with charts like this

AIR will have similar charts on Friday, unfortunately its all about the outlook.

[Beagle]

As I mentioned earlier, lets hope this is an "isolated management issue" (and the 8 week payment issue mentioned by another poster on Stuff is also an "isolated management issue")... and doesn't paint more disturbing/questioning issues of management and how the handle things going forward...

Hope so but the old cliché of where there's smoke there's fire springs to mind. Hope I'm wrong.

[trader_jackson]

http://www.afr.com/business/health/is-this-as-good-at-it-gets-for-blackmores-20160824-gqzt9y

Interesting article, CVT is by far not the success story 'growth stock' that has been hit hard recently "Blackmores shares tumbled 13 per cent or $20.54 to $140.32 in early trade. Yes, the stock is still up 72 per cent over the last 12 months, but it is now well off the $220 it peaked at in early January"

Seem to have also struck some channel issues similar to CVT... interesting the part around "daigou"... essentially could result in lower margins.

The question at the end is essentially the exact same as what we debating here (open the link to read more ;) hope you are all able to access it)

[winner69]

Can you break out the debt and cash flow charts as well?

Shouldn't really as I am a believer ......but as you seem to be down on them I'll post it anyway

The cash flow not published but I have a beaut chart for that

[Joshuatree]

Thinking about that mountain of honey intensifying potentising and as time goes by UMFying, maximising.

[jim9358]

How can punters not think this is a $15 or $20 share with charts like this

thanks for that winner69

[winner69]

Be back to 10 bucks today

Amazing how good that sounds - a few months we would be horrified with such a thought

[jim9358]

The "chicken littles" will prob rush back in and catapult it! :t_up:

[ShouldHaveHeld]

Swarming back to the hive

[winner69]

Swarming back to the hive

Good eh

Never again will we see sub-$10

Chart says so

[IAK]

No worries - "Comvita confident it will weather new Chinese rules"

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11700416

[macduffy]

Manuka honey featuring on Bloomberg News.

http://www.bloomberg.com/news/articles/2016-08-24/there-s-a-battle-to-trademark-manuka-the-champagne-of-honeys

[ratkin]

Good eh

Never again will we see sub-$10

Chart says so

Maybe tea leaves will work better :ohmy:

[winner69]

Maybe tea leaves will work better :ohmy:


Ha ha - it has too

Probably only a minor blip

Doesn't look that good at the moment though

What brand of tea gives best results

[Beagle]

The hound has a very sweet tooth and likes all things honey especially manuka honey but realises its not flavour of the month so staying on the sidelines at present.

[winner69]

Does manuka honey go any good with whiskey in the hot toddy as a cold remedy?

[Beagle]

Does manuka honey go any good with whiskey in the hot toddy as a cold remedy?

Absolutely mate, get into it.

[Sideshow Bob]

Just go heavy on the Whiskey, single malt, minimum 12 yo. Mmmmmm lovely.

[Balance]

Just go heavy on the Whiskey, single malt, minimum 12 yo. Mmmmmm lovely.

Add in some Omega 3? From SeaDragon at a special Comvita price?

[jim9358]

Does manuka honey go any good with whiskey in the hot toddy as a cold remedy?

I go Blis, sucking on maximum dosage frequency until symptoms reverse often taking those after 10ml of Artemis Virogone, maximum dosage frequency: People been dropping like flies for over a month down here, massive days off work, ...I get a touch of the symptoms but doesn't go full blown, no days off, ,,,touch-wood! ...been doing for several years now, stay standing while others fall.

[percy]

Does manuka honey go any good with whiskey in the hot toddy as a cold remedy?

Helps,but to obtain the best results you need to add Drambuie chasers.
Keep repeating the dossage, until you either you come right, or just don't really care.!

[Vaygor1]

Helps,but to obtain the best results you need to add Drambuie chasers.
Keep repeating the dossage, until you either you come right, or just don't really care.!

The tried-and-tested method is to place your hat on one of the bedposts at the foot of the bed. Then sit in bed knocking back the wee Drams until you can see two hats. :rolleyes:

[Beagle]

The tried-and-tested method is to place your hat on one of the bedposts at the foot of the bed. Then sit in bed knocking back the wee Drams until you can see two hats. :rolleyes:

:lol: :lol:

[Joshuatree]

Whisky def the best . has the highest UMF factor.Turns the hat on the bedpost from an Ugly Mother F----er into this Urban Dictionary: UMF (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&uact=8&ved=0ahUKEwjNhbyavO_OAhVBo5QKHRSDCrgQFgg0MAU&url=http%3A%2F%2Fwww.urbandictionary.com%2Fdefine. php%3Fterm%3DUMF&usg=AFQjCNGpvzrzsoN8IOOZnO-tqyzPkzL9iw&sig2=RB-aXtepTUZRTSJYkT7tIg)

[winner69]

I go Blis, sucking on maximum dosage frequency until symptoms reverse often taking those after 10ml of Artemis Virogone, maximum dosage frequency: People been dropping like flies for over a month down here, massive days off work, ...I get a touch of the symptoms but doesn't go full blown, no days off, ,,,touch-wood! ...been doing for several years now, stay standing while others fall.

What % alcohol is that Artemis Virogone stuff - really potent?

Need something strong for the hot toddy

[jim9358]

What % alcohol is that Artemis Virogone stuff - really potent?

Need something strong for the hot toddy

Ha haaa haven't thought about alcohol content and heating it ;-) ...but a lotta herbal remedies are prep'd in alcohol ! Artemis is an amazing small biz story started by Sandra Clair a Swiss herbalist here in Dunedin. https://artemis.co.nz/

[winner69]

If this doesn't help CVT becoming a $20 share nothing will

https://www.nzx.com/companies/CVT/announcements/288461


Even if it is giving away ~7% of the company

[Beagle]

If this doesn't help CVT becoming a $20 share nothing will

https://www.nzx.com/companies/CVT/announcements/288461


Even if it is giving away ~7% of the company

Not giving away but yes I see this as a very sound move and note it boosts margins into China where CVT believe 60% of sales end up. Also noting the acquisition is earnings accretive from year 1.

I'm back in today as I think this is a very important development for the company and address's my concerns previously articulated. Trades cum a "whopping" 2 cent final divvy...this one definitely not part of any planned dividend stripping strategy :)

[Ogg]

Great announcement.

Market is asleep. This should re rate back to $12 by the end of the month. Almost all of the risk about access to Chinese market has gone.

This is how the Chinese authorities do business. They play hard ball and make it difficult until you're force into a JV. Not exactly the best outcome but this is how it is over there.

Spring is here. Flowers are blooming. Bees are coming out. Good times ahead.

[winner69]

Not giving away but yes I see this as a very sound move and note it boosts margins into China where CVT believe 60% of sales end up. Also noting the acquisition is earnings accretive from year 1.

I'm back in today as I think this is a very important development for the company and address's my concerns previously articulated. Trades cum a "whopping" 2 cent final divvy...this one definitely not part of any planned dividend stripping strategy :)

Roger - good to see you back in. Seeing they are cheaper now than when you sold you got heaps more eh. You sneaky bugger.

Nothing really changed. If 'doubts' over China were the reason for the recent falls today's announcement must alleviate those a lot.

I know they didn't give away 7% of the company per se ......but shows you what a strong share price can do for you when you want to buy things / invest

Somebody said CVT a $20 share - whoever it was might be right

[ratkin]

Not giving away but yes I see this as a very sound move and note it boosts margins into China where CVT believe 60% of sales end up. Also noting the acquisition is earnings accretive from year 1.

I'm back in today as I think this is a very important development for the company and address's my concerns previously articulated. Trades cum a "whopping" 2 cent final divvy...this one definitely not part of any planned dividend stripping strategy :)

So now we can look forward to many glowing posts on the companies prospects. Until you sell again of course

[winner69]

So now we can look forward to many glowing posts on the companies prospects. Until you sell again of course

Roger - take a deep breath now - remember what STMOD said on the AIR thread.

[Beagle]

Roger - good to see you back in. Seeing they are cheaper now than when you sold you got heaps more eh. You sneaky bugger.

Nothing really changed. If 'doubts' over China were the reason for the recent falls today's announcement must alleviate those a lot.

I know they didn't give away 7% of the company per se ......but shows you what a strong share price can do for you when you want to buy things / invest

Somebody said CVT a $20 share - whoever it was might be right

Thanks mate, looks like we're "in clover" already :) I didn't realise 60% of products end up in China, WOW, who would have thought...just as well management are on to it and have been working on this new JV for months. No question with this being earnings accretive from the get-go this is a real game changer.

[Balance]

Thanks mate, looks like we're "in clover" already :) I didn't realise 60% of products end up in China, WOW, who would have thought...just as well management are on to it and have been working on this new JV for months. No question with this being earnings accretive from the get-go this is a real game changer.

Would not trust the Chinese to operate a subsidiary company for foreign interests - best to use them as suppliers or distributors.

[Beagle]

Would not trust the Chinese to operate a subsidiary company for foreign interests - best to use them as suppliers or distributors.

Did you read the news article mate ? I've had very little time today with business pressure but from a real quick read this morning they're big shareholders in CVT already personally, and will be bigger with this JV arrangement and they've been working successfully together with these poeple for over a decade already.

[Balance]

Did you read the news article mate ? I've had very little time today with business pressure but from a real quick read this morning they're big shareholders in CVT already personally, and will be bigger with this JV arrangement and they've been working successfully together with these poeple for over a decade already.

I did - am sounding a note of warning before we all get carried away with an investment in a China company as the solution to distribution in China. Fonterra and quite a number of NZ companies found out the hard way.

Talk to any Asian companies and they will caution that it is best to distribute using China owned companies.

[winner69]

Share price up over $10.70 now

Market likes the announcement by looks of it and the 'disappointment' of the results announcement now all forgotten

Looking good

I shouted myself some Chanui tea the other day - quite nice but tea leaves are awesome - point to CVT being $12 plus in next few months

[winner69]

I hadn't properly read the recent announcement re JV in China

It's really positive and a good story - building long term relationships to generate future prosperity.

They say EPS accretive (starts April next year) which implies at least an extra couple million NPAT in F18

I just happen to notice share price over $10.80 now

[jim9358]

I did - am sounding a note of warning before we all get carried away with an investment in a China company as the solution to distribution in China. Fonterra and quite a number of NZ companies found out the hard way.

Talk to any Asian companies and they will caution that it is best to distribute using China owned companies.

I sped through it this morning too in ODT: Took it that CVT bought into the distributor, 49%, powerful position, but not owning them: (I'll go back to it later to check my understanding correct but by all means correct me!) There is a ton of incentive there for this distributor to continue getting it right. There was a guy on RNZ today (financial commentator) who said that he checked out one of the CVT dedicated outlets in China, in a Mall, to see out the front of the shop a "Gift Pack" to the value of NZ$750 for 5 small CVT items! The significance of that value was also in the "numerology" of that value in Chinese currency: VERY CLEVER! It is premier value product targeting wealthy Chinese. In the mid '80's I recall a fact in some article I was reading that China had a million millionaires then! CVT are doing amazing and very cleverly IMHO. Good for the ride!

[ratkin]

Meanwhile the unramped Ebos closes in on Twenty dollars

[winner69]

I sped through it this morning too in ODT: Took it that CVT bought into the distributor, 49%, powerful position, but not owning them: (I'll go back to it later to check my understanding correct but by all means correct me!) There is a ton of incentive there for this distributor to continue getting it right. There was a guy on RNZ today (financial commentator) who said that he checked out one of the CVT dedicated outlets in China, in a Mall, to see out the front of the shop a "Gift Pack" to the value of NZ$750 for 5 small CVT items! The significance of that value was also in the "numerology" of that value in Chinese currency: VERY CLEVER! It is premier value product targeting wealthy Chinese. In the mid '80's I recall a fact in some article I was reading that China had a million millionaires then! CVT are doing amazing and very cleverly IMHO. Good for the ride!

CVT taking 51% of the JV

Also of note is that Zhu Guangping's (majority owner of SCNT) wife owns 5.12% of Comvita ....and after the deal the Zhu family stake in Comvita will rise to 10%.

Seems to be plenty of motivation to make all this work

Hope this bit of (so called) ramping works --- got to keep the CVT share price outperforming the EBO
share price - or maybe it's just a case of both being very good company's but one does seem to do better than the other (share price wise)

[moimoi]

Its not earnings accretive in its 1st full year of trading UNLESS start up costs are "ignored"..!!

What are the start up costs?

Mind you, under the evidently acceptable Dick Smith accounting process, its probably earnings accretive before it even happened....

[Balance]

Its not earnings accretive in its 1st full year of trading UNLESS start up costs are "ignored"..!!

What are the start up costs?

Mind you, under the evidently acceptable Dick Smith accounting process, its probably earnings accretive before it even happened....

Plus - is it eps accretive?

[Beagle]

Good write-up on NBR behind the paywall on this new JV and over 6 minute interview with the CEO. He talked some pretty interesting margin expansion numbers. Would love to cut and paste but the police say I'm not allowed. Bottom line is they've been working together with these people already for over a decade. Don't know how others feel but by the time you've had a business relationship for over a decade you usually have a pretty good handle on who you're doing business with. There's almost always start up costs with new JV's, (you have to invest to get returns) but they're saying its earning accretive from year one and based on the interview that the CEO gave and margin expansion numbers he was talking I am very comfortable with this new JV.

[BlackPeter]

Good write-up on NBR behind the paywall on this new JV and over 6 minute interview with the CEO. He talked some pretty interesting margin expansion numbers. Would love to cut and paste but the police say I'm not allowed. Bottom line is they've been working together with these people already for over a decade. Don't know how others feel but by the time you've had a business relationship for over a decade you usually have a pretty good handle on who you're doing business with. There's almost always start up costs with new JV's, (you have to invest to get returns) but they're saying its earning accretive from year one and based on the interview that the CEO gave and margin expansion numbers he was talking I am very comfortable with this new JV.

Agreed. I think the announced JV is clearly a good thing and in my view a step towards risk reduction. What might concern me a bit more is the 60% reliance on just one market, which happens to be quite tightly politically controlled. Embargoes for political reasons are unfortunately not unheard of and neither are import restrictions based on political motives CVT has no control over. I think what CVT now definitely needs to do is to put effort into diversifying into other markets.

Discl: not holding (yet:sleep:)

[Balance]

CVT announcements and commentary in recent times raise a few red flags to me :

1. CEO's comments that import restrictions in China did not impact on CVT - and then admitted the restrictions do indeed impact.

2. We know know 60% of CVT's sales end up in China directly and indirectly - so it is naive at best but downright misleading at worse for CVT to state 1 in the first place.

3. The JV is obviously in recognition of 1 & 2 - the issue is why CVT needs to take a shareholding in the distributor when they are already doing a good job?

4. The release states that the investment is earnings accretive - one better hope so as CVT is paying over $30m (in shares). But is it eps accretive or just earnings accretive? Big difference between the two.

5. Will the JV offset the impact of 1 and 2?

Worthwhile considering irrespective of how bullish or bearish you have been.

[Beagle]

Fair enough Balance. Like you I have reservations around the disclosure made earlier but as stated at the time, in my opinion the Herald doesn't always report what you say in an accurate or fulsome manner.

Further, they did say that they have been working on this for months. I take you point about your question about earnings accretive of EPS accretive and acknowledge the difference but if you'd heard the interview that was reported behind the paywall on NBR you wouldn't be quibbling over this minor share issue and I expect it will be inconsequential to the overall scheme of things.

Not a big position for me ~ 4% portfolio and I am very comfortable with that.

[jim9358]

CVT taking 51% of the JV

Also of note is that Zhu Guangping's (majority owner of SCNT) wife owns 5.12% of Comvita ....and after the deal the Zhu family stake in Comvita will rise to 10%.

Seems to be plenty of motivation to make all this work

Hope this bit of (so called) ramping works --- got to keep the CVT share price outperforming the EBO
share price - or maybe it's just a case of both being very good company's but one does seem to do better than the other (share price wise)

Ha haaa Winner is there a CVT v EBO race on I don't know about?

Oh! ok CVT are controlling. (i didn't get back to it ...other type of "work" occupied today) Oh well "controlling" should be fine and at 51/49 still works that "i do very well, you do very well!!!" ;-)

[winner69]

Chris Lee on manuka honey

http://www.chrislee.co.nz/taking-stock

This ONL looks interesting for punters

[jim9358]

Chris Lee on manuka honey

http://www.chrislee.co.nz/taking-stock

This ONL looks interesting for punters

Good newsletter confirming my own thought that China tightening up its borders / regulations on what is or is not Manuka is completely in CVT's favour. Ever improving "trusted importer/distributor/retailer" status will see CVT go ballistic ... imho! The whole nation should be planting Manuka on its rubbish land! I've planted 4 against my southern hedge-line and have been contemplating inviting one of the new trend, urban apiarists, to install a hive in my back-yard, a movement going on around the world! :t_up:

[kiora]

Good newsletter confirming my own thought that China tightening up its borders / regulations on what is or is not Manuka is completely in CVT's favour. Ever improving "trusted importer/distributor/retailer" status will see CVT go ballistic ... imho! The whole nation should be planting Manuka on its rubbish land! I've planted 4 against my southern hedge-line and have been contemplating inviting one of the new trend, urban apiarists, to install a hive in my back-yard, a movement going on around the world! :t_up:

But Jim,you need a ha of Manuka per hive for Manuku honey,you will need to turn all your neighborhood in to scrub land !
http://www.virtualoceania.net/newzealand/photos/flora/manuka/nz1259.shtml

[jim9358]

But Jim,you need a ha of Manuka per hive for Manuku honey,you will need to turn all your neighborhood in to scrub land !
http://www.virtualoceania.net/newzealand/photos/flora/manuka/nz1259.shtml

Cheers ;-) I was referring to spare hectares around the whenua. My planting in my backyard is mainly because I like the plants and seeing the bees and birds around, wasn't really expecting apiarist to get authentic manuka-honey from my 4. Got quite a collection of natives now protected against the southerlies by existing hedge-row. Even got a Kauri (here in Dunedin!) which took a bit of saving when it packed a sad for near 2 years!

[Apathy]

I did - am sounding a note of warning before we all get carried away with an investment in a China company as the solution to distribution in China. Fonterra and quite a number of NZ companies found out the hard way.

Talk to any Asian companies and they will caution that it is best to distribute using China owned companies.

Couldn't agree more. My guess - they are significantly overstocked and its a short term fix to the problem. Good luck controlling SOR and/or consignment stock in China...

Also thought it was pretty funny they have booked a $2m profit on Sea Dragon investment....

[LAC]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11708267

Quite a few mentions of "softer" trading.

[RupertBear]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11708267

Quite a few mentions of "softer" trading.

That made me think the sp would go down again, but no its gone up 50cents! :eek2: Which would have been good if I hadnt sold a few at $10.70 :(

[Beagle]

Investors seem happy that the bean counters are looking for efficiency gains...

[winner69]

Still learning

What's the MSG grading system thats used by some producers - different from the UMF that Comvita uses?

[jim9358]

That made me think the sp would go down again, but no its gone up 50cents! :eek2: Which would have been good if I hadnt sold a few at $10.70 :(

CVT's my best gainer, again! Can't wait for their next sales report. Their plan is better than TIL's.

[kiwidollabill]

Still learning

What's the MSG grading system thats used by some producers - different from the UMF that Comvita uses?

You mean the 'MGO' (Methyl glyoxal) system?

Its a somewhat outdated way of determining the grade of Manuka honey. MGO is the active ingrediant in manuka, formed in the conversion from DHA.

UMF grading takes into account the MGO, DHA and Leptosperin levels of the honey.

[winner69]

You mean the 'MGO' (Methyl glyoxal) system?

Its a somewhat outdated way of determining the grade of Manuka honey. MGO is the active ingrediant in manuka, formed in the conversion from DHA.

UMF grading takes into account the MGO, DHA and Leptosperin levels of the honey.

My fault - it's MGS - Molan Gold Standard
http://www.mgs.org.nz/

It's used by an outfit in the Wairarapa which appears to export heaps of manuka honey / products

[kiwidollabill]

My fault - it's MGS - Molan Gold Standard
http://www.mgs.org.nz/

It's used by an outfit in the Wairarapa which appears to export heaps of manuka honey / products

Watson & Sons? Yea theyre pretty big, plus now have a tie up with Ngai Tahu to access manuka rich land...

As for MGS, somewhat competiting to UMF standard, member base is alot smaller and ~5years behind the testing development of the UMF assoc

[winner69]

Watson & Sons? Yea theyre pretty big, plus now have a tie up with Ngai Tahu to access manuka rich land...

As for MGS, somewhat competiting to UMF standard, member base is alot smaller and ~5years behind the testing development of the UMF assoc

That's them

Seem to have rather ambitious plans for the future

Market seems lucrative enough for Comvita and. Comvita wannabe

[kiwidollabill]

That's them

Seem to have rather ambitious plans for the future

Market seems lucrative enough for Comvita and. Comvita wannabe

They've always been a reasonably sized player. The 'control' over supply (and margin) has shifted from the packer, to the beekeeper and is now with the land owners. The big winners in the industry are going vertically integrated and will squeeze some of the smaller players

DOC is also looking to lease Manuka rich blocks of theirs to beekeepers in the near future.

[jim9358]

Sure wish I could buy more CVT but I've cleaned out my CMA (asb-sec acc. !) ....bought back in after those here sold-off and going gangbusters again, they're at +15% for me!!! I've got a profit sell rule of 11% but I believe their plan, and what others say that they've a long way to go! ...so here's staying in! ;-)

[stoploss]

Sure wish I could buy more CVT but I've cleaned out my CMA (asb-sec acc. !) ....bought back in after those here sold-off and going gangbusters again, they're at +15% for me!!! I've got a profit sell rule of 11% but I believe their plan, and what others say that they've a long way to go! ...so here's staying in! ;-)

Jim , are you a trader ...why limit your profits @ 11 % .
IMO if you do this you will not be able to make enough to make up for the inevitable losses along the way .
Also you absolutely miss out on the supersize profits of the big winners .... You don't want to be the guy that purchased AAPL @ 10.00 sold @ 11.10 , and watched them double to 22, 44,88,176,352,704 odd then have a 7:1 split ......

[jim9358]

Jim , are you a trader ...why limit your profits @ 11 % .
IMO if you do this you will not be able to make enough to make up for the inevitable losses along the way .
Also you absolutely miss out on the supersize profits of the big winners .... You don't want to be the guy that purchased AAPL @ 10.00 sold @ 11.10 , and watched them double to 22, 44,88,176,352,704 odd then have a 7:1 split ......

Thanks for the advice. Yep I am playing as a trader at present but settling on a good dozen I'll leave mostly alone for a year and more soon, unless dramatics happen! I've got a list of rules I 'play' by. Prefer caution. CVT I'm in with a base qty for long haul as I love this co.. But, Am in and out with small qty on top of base qty according to the dips and highs the rest of you create. One of the best advices I got over 20 years ago was from a guy who made his fortune personal trading. He said the trouble with most people is they are too greedy. His main rule was to look for just 10% and then sell. I don't know, he may have had more complex functions on top of that, ....but anyway, I do ! "Inevitable losses on the way", ...like your name I have stop-losses at - 9%! ...but again, not on all of it! ...yet to find any body with all the answers including trading houses! ...but sure is good to scope other's thoughts here! ;-)
...hope that helps you , what do you reckon?!

[stoploss]

If you have a base quantity you are staying with then you can stay with the trend . Way too hard to talk specifics . Like you said always learning . If it works for you great , congratulations on having a set of rules and sticking to them . It is that discipline that is key .
Some good posts on here from KW , if you can find them.
Cheers S/L

[jim9358]

If you have a base quantity you are staying with then you can stay with the trend . Way too hard to talk specifics . Like you said always learning . If it works for you great , congratulations on having a set of rules and sticking to them . It is that discipline that is key .
Some good posts on here from KW , if you can find them.
Cheers S/L

Cheers: Is that full ID name? "KW"? ...do you mean he/she here on CVT or anywhere the whole NZX folder?

[stoploss]

Cheers: Is that full ID name? "KW"? ...do you mean he/she here on CVT or anywhere the whole NZX folder?
Her ID was KW , unfortunately I believe most of her posts were deleted. However those that people replied with quote are still around . Never buy in a downtrend was a classic .

[Joshuatree]

jim this thread here was started by KW. Some simple essential T/A to use "Using TA to time entries and exits"

[jim9358]

Her ID was KW , unfortunately I believe most of her posts were deleted. However those that people replied with quote are still around . Never buy in a downtrend was a classic .

Yes got that on my list of rules. Been diddling and learning for 20 years, but now I see the horizon of retirement and cheesed off with bank TD's, am making this my 2nd job (self-employed so can scratch out time somewhat as I please through the day, although was busy and missed a shift 3 weeks ago which cost me! C'est la vie!). Got 2/3 in mortgage free home and plot of dirt in a high cap gain town so happy with my meeting the investment spread rule!

Might put my rules up one day if it doesn't get me busted and posts removed like KW ;-)

[stoploss]

Jim , think investment rules will be safe .

[Joshuatree]

Go for it Jim, please share your nous.. KW asked for her posts to be removed when she left ,except for a few on the T/A thread

[jim9358]

Go for it Jim, please share your nous.. KW asked for her posts to be removed when she left ,except for a few on the T/A thread

Oh she wasn't busted then. I need do a re-write and additions ...they do mutate slightly. Maybe better in "holdings" folder or some other than this CVT. Won't be today as standard "day-biz" tied up.

Looking forward to post TIL meet today. Anybody else?

A little anxious about serious negative talk about outside NZ set to implode, taking us down with them, esp. on "black monday" folder. You or Anyone else here feel rattled about sentiment lately?

Again, CVT "marrying" their distributor got to be good to keep some cashflow irrespective of global implosion.

[winner69]

Director Sarah keeping to her buying plan - always good to see insiders buying

https://www.nzx.com/files/attachments/245444.pdf

[JayRiggs]

Placement and MOU with China Resources Ng Fung Limited 5:08pm, 21 Oct 2016 | PLACE Comvita announced today, the placement undertaken to China Resources Ng Fung Limited (China Resources Ng Fung) of 2,000,000 new ordinary shares in Comvita at $10.60 per share, bringing China Resources Ng Fung’s existing stake of less than 5% in Comvita to approximately 9.0%. China Resources Ng Fung is a leading integrated food enterprise in China, wholly-owned by China Resources Enterprise Limited.
The placement will strengthen working capital and provide funding to support several strategic initiatives currently under consideration by Comvita.
Contemporaneously, Comvita has signed a Memorandum of Understanding (MOU) with China Resources Ng Fung regarding co-operation in the Hong Kong and Mainland China market places. China Resources Ng Fung intends to assist Comvita in stocking Comvita products in stores operated by China Resources Ng Fung’s affiliated retailers in Hong Kong and Mainland China, as well as assisting with regulatory processes where appropriate. China Resources Ng Fung’s affiliated retailers have over 4,000 supermarket outlets in China.
This MOU with China Resources Ng Fung has the full support of our China distributor with whom we are completing a JV distribution company in China as announced to the market on 5th September 2016. It will allow Comvita to access potential channels into China for existing and future Comvita products which may otherwise be unavailable to Comvita. Further, it will reduce our dependence on the third party exporter channels that have been a feature of our China growth in the financial period ended 30 June 2016. These channels have recently been subjected to regulatory change and new taxation imposts which has impacted sales in the last few months. Our arrangements with China Resources Ng Fung, together with our existing distribution arrangements, will diminish the impact from the volatility of these channels, which however still remains important for Comvita in New Zealand and Australia.
Comvita CEO Scott Coulter, commented, “We are confident that China Resources Ng Fung will be extremely beneficial in achieving our aspirations in China including opening up more opportunities for our new distribution JV. China Resources Ng Fung is a highly reputable corporation with extensive network in Mainland China and Hong Kong and the Executives respect our culture and the need for Comvita to be a New Zealand controlled business. We are comfortable from numerous discussions that the key Executives of China Resources Ng Fung really do ‘buy in’ to our culture and values.”
Mr Weiyong Wang, CEO of China Resources Enterprise Limited, commented, “We are delighted to be invited to be a substantial shareholder in Comvita. Comvita has been selling into China for 12 years and we hold the brand in the very highest regard. Further, we believe retention of significant New Zealand ownership in the long term was and will continue to be a vital ingredient of the business.”



https://www.nzx.com/companies/CVT/announcements/291306

[Apathy]

https://www.nzx.com/companies/CVT/announcements/291306

Two separate distribution deals in the last month - year end stock more than double (an extra $51m) prior period and trade receivables down 30% which is a pretty good indicator of sales decline.

$2m profit booked on SEA fiasco and layoffs at head office.

The area is getting very congested and it is going to be a real test to see who can actually make a dollar - very timely cash injection and partnership I would suggest. Maybe not done from a position of strength however.

[ados_nz]

Have we seen a peak in the CVT price? Or do you think it can push through and take the market poll position....

[Beagle]

https://www.nzx.com/files/attachments/246731.pdf

Main points:-
Very difficult trading conditions in first quarter. Ouch
Expecting a loss in the first half to 31 December - Double Ouch !
Expecting net profit for FY17 to be broadly similar to FY16 - Triple ouch, no profit growth on the back of increased share capital = EPS reduction !
Target of $400m annual sales has "very conveniently" been pushed out to 2021, from 2020.

Not impressed that they didn't front foot the whole regulatory issue in China properly much earlier.
At least they have taken the positive step of culling staff, (obviously this is a good step by management) but its fair to say the company is experiencing significant growing pains.

I expect the SP to under-perform until they can prove they can regain growth momentum.

[BlackPeter]

https://www.nzx.com/files/attachments/246731.pdf

Main points:-
Very difficult trading conditions in first quarter. Ouch
Expecting a loss in the first half to 31 December - Double Ouch !
Expecting net profit for FY17 to be broadly similar to FY16 - Triple ouch, no profit growth on the back of increased share capital = EPS reduction !
Target of $400m annual sales has "very conveniently" been pushed out to 2021, from 2020.

Not impressed that they didn't front foot the whole regulatory issue in China properly much earlier.
At least they have taken the positive step of culling staff, (obviously this is a good step by management) but its fair to say the company is experiencing significant growing pains.

I expect the SP to under-perform until they can prove they can regain growth momentum.

Makes sense. Good on you for selling fast - no material offers left.

Agree - the last quarter was shocking - I don't dare to extrapolate the numbers to a full year. On the bright side ... maybe now I can buy the shares for $4 as I always intended?

Discl: not holding and hey, my broker is an optimist. They rejected my $4 order for CVT. Apparently I am too far away from the market price :crying:. Sigh - lets try again tomorrow;