Comvita - CVT

[Balance]

So - you are buying after this dip bottoming out?

Nope.

Note to myself (again!) : never buy into a downtrend and never buy until downgrades become upgrades.

[Bilbo]

Managed to get out at $8.29 this morning after thinking about selling yesterday, but reasoning the SP was still rising, so decided to wait. Read the announcement this morning and hit the sell button immediately. It's been a good recovery from the previous bottom of $6 so happy to lock in the gain from there (even though selling at a loss from my entry point).

[Balance]

So 26 October 2016 that 'we expect our net profit after tax for the June 2017 financial year will be similar to our 2016 after-tax operating earnings of $17.1m. '

Then on January 23rd 'we now anticipate that our 2017 after-tax operating earnings will be in the range of $5-7m'

And then today 'result in an after tax operating loss for the financial year ended 30 June 2017, in the order of $7m'

Enough said - i think Mr Coulter has no idea what's going on, maybe too much honey mead made him slightly delusional

First down grade $10m-$12m and this downgrade $12m-$14m. It's amazing the share price has collapsed completely. Maybe hope is a strategy

This is only the second downgrade - third one to come.

Anyone look at the financial position? Higher inventories and losses may necessitate a capital raising?

[winner69]

Luke Bunt a director - companies he involved in seem to be having a bad run of late.

Least he can tell from first hand experience what high stock levels, poor sales and cash burn leads to.

[Ogg]

Managed to get out at $8.29 this morning after thinking about selling yesterday, but reasoning the SP was still rising, so decided to wait. Read the announcement this morning and hit the sell button immediately. It's been a good recovery from the previous bottom of $6 so happy to lock in the gain from there (even though selling at a loss from my entry point).

LOL, lucky. The guy who bought that must have been pissed.

[winner69]

This is only the second downgrade - third one to come.

Anyone look at the financial position? Higher inventories and losses may necessitate a capital raising?

At an operational level they been cash flow negative for the last 3 half year reporting periods - to the tune of $40m

Hard to see them being cash flow positive in H2 seeing thy can't sell all this excessive inventory.

At Sept they had $4m in the bank

More family silver to be sold? Yes Balance cap raising from somewhere a possibility.

[percy]

The easiest way out for them is to sell stock.
They are not in the storage business.
The easiest way to sell stock is to "meet the market".
Manuka Honey has been off our shopping list as it is too expensive.
We will start buying again if and when they half the price.
I expect others will do the same.

[winner69]

Neighbour was excited that Comvita had 'updated' their guidance. I didn't have the heart to tell him that up words don't always mean more profit.

He and his mates bit peeved with their 'investment' in Comvita .......but I did tell him that he should be as happy as Larry with his 'investment' in Heartland

[percy]

Neighbour was excited that Comvita had 'updated' their guidance. I didn't have the heart to tell him that up words don't always mean more profit.

He and his mates bit peeved with their 'investment' in Comvita .......but I did tell him that he should be as happy as Larry with his 'investment' in Heartland
Yes owning the bank is way better than having money in the bank.

[stoploss]

The easiest way out for them is to sell stock.
They are not in the storage business.
The easiest way to sell stock is to "meet the market".
Manuka Honey has been off our shopping list as it is too expensive.
We will start buying again if and when they half the price.
I expect others will do the same.

Problem is , it is a one off as with this weather next season isn't a given either ..... Just wish normal honey would come back down in price as well ....

[kiwidollabill]

The easiest way out for them is to sell stock.
They are not in the storage business.
The easiest way to sell stock is to "meet the market".
Manuka Honey has been off our shopping list as it is too expensive.
We will start buying again if and when they half the price.
I expect others will do the same.

Problem is that this is hitting many players in the industry....

I hear stories of alot of inventory sitting in both NZ and CHN with no buyers at above cost prices.

There is now a race to the bottom and sadly a commodisation of what was a 'high value' industry.

[sb9]

Chinese buyers are still asleep. It will probably bounce in the afternoon.

May be case of "once bitten twice shy" this time for those Chinese buyers by the looks...

[RGR367]

...........
We will start buying again if and when they half the price.
I expect others will do the same.

Okay. We'll save enough to buy in at $4. Even lower would be nice :p

disc: not a holder

[Balance]

Actually it's not good or healthy for our market to have three companies (WHS & OHE & CVT) hammered in recent times.

Hundreds of millions of dollars dissipate into thin air. :scared:

You can sense the punters now heading to the hills? :D

[stoploss]

Actually it's not good or healthy for our market to have three companies (WHS & OHE & CVT) hammered in recent times.

Hundreds of millions of dollars dissipate into thin air. :scared:

You can sense the punters now heading to the hills? :D

You forgot the elephant in the room FBU ......

[Balance]

You forgot the elephant in the room FBU ......

Indeed I have!

Shocker!

[Beagle]

So 26 October 2016 that 'we expect our net profit after tax for the June 2017 financial year will be similar to our 2016 after-tax operating earnings of $17.1m. '

Then on January 23rd 'we now anticipate that our 2017 after-tax operating earnings will be in the range of $5-7m'

And then today 'result in an after tax operating loss for the financial year ended 30 June 2017, in the order of $7m'

Enough said - i think Mr Coulter has no idea what's going on, maybe too much honey mead made him slightly delusional

First down grade $10m-$12m and this downgrade $12m-$14m. It's amazing the share price has collapsed completely. Maybe hope is a strategy

Agree. I have lost confidence this relative newcomer to the CEO ranks has the commercial skills to manage the company properly and their woeful inability to forecast is quite frankly totally pathetic. I'm out !


This is only the second downgrade - third one to come.

Anyone look at the financial position? Higher inventories and losses may necessitate a capital raising?

Very good point mate. More trouble coming I sense. Big loss in first half of this year...they may struggle to get through this calendar year without a capital raise. I won't be burned again AT ANY PRICE.

[Balance]

Agree. I have lost confidence this relative newcomer to the CEO ranks has the commercial skills to manage the company properly and their woeful inability to forecast is quite frankly totally pathetic. I'm out !

Very good point mate. More trouble coming I sense. Big loss in first half of this year...they may struggle to get through this calendar year without a capital raise. I won't be burned again AT ANY PRICE.

What is telling about the sp action today is that the price has dropped very sharply on very low volume.

Suggest there are big boys out there looking to get out.

Unless the Chinese step up to the plate, the bottom this time round could be a long way down.

[Beagle]

Yes it is becoming harder to ignore the recovery. Clear break above 100 day MA today on the back of the Chinese authorities flip-flop which will allow continuation of grey channel imports to China apparently without new labelling a licensing requirements.
Blackmores and Bellamy's up about 14% since that Chinese announcement earlier this week but CVT relatively unchanged ?
Maybe the market is starting to look through the current year's abysmal projected profit and believes that with the grey channel now all clear and a new joint venture partner with a very wide distribution network in China coming on stream on 1 July and with 24 new products this year alone the market seems to be starting to price in future growth again.
Company Investor presentation February 2017 https://www.nzx.com/files/attachments/253401.pdf
Maybe the worm, (bee?) has turned on this one ?


Hmmm..wonder what made you to jump on board in the first instance onto this one Roger...just curious nothing sinister :)

See above post mate. Was a small speculative play based on the China policy flip-flop and some technical signals. Lesson learned. Only ever back technical indicators when you truly believe in the fundamental story and have genuine confidence in management. Hounds always learning mate, just like everyone else. Hound his snout stung with a good Bee sting with this one but I prefer to take the medication and avoid potentially painful swelling and worse.. having to live in a sticky situation with management who I don't trust. Scott Coulters record ever since the tax problems with grey channel exports first emerged has been absolutely appalling. He talks even now about overheads have been cut but IIRC only about twenty something staff went out of 450. To little and they have been well behind the eight ball on the whole regulatory change for a long time now. They keep blaming everything on the weather and regulatory changes but I honestly think there's more to it than that and management's answers are far less transparent than they should be.
Plenty of well managed and well directed alternative companies to invest in rather than speculate if this will ever be successful again. TIL has more than halved from its peak, this one deserves even rougher treatment by the market in my opinion as at least TIL are still profitable !

[Beagle]

What is telling about the sp action today is that the price has dropped very sharply on very low volume.

Suggest there are big boys out there looking to get out.

Unless the Chinese step up to the plate, the bottom this time round could be a long way down.

Agreed. Been dropping all day too, bad sign. Always appreciate your balanced input mate :) Redeployed my capital straight back into SUM. Talk about chalk and cheese in terms of management credibility !
.

[Bilbo]

What is telling about the sp action today is that the price has dropped very sharply on very low volume.

Suggest there are big boys out there looking to get out.

Unless the Chinese step up to the plate, the bottom this time round could be a long way down.

It went to $6.50 after January announcement. Surely this announcement paints a worse picture than the January one? In which case I would expect to see the sp in the low $6s in the near future and maybe lower. But then again, maybe the uncertainty of the Jan announcement has now been cleared up, and sp might hold above $7.

I'm out and not likely to be back anyway.

[Beagle]

So 26 October 2016 that 'we expect our net profit after tax for the June 2017 financial year will be similar to our 2016 after-tax operating earnings of $17.1m. '

Then on January 23rd 'we now anticipate that our 2017 after-tax operating earnings will be in the range of $5-7m'

And then today 'result in an after tax operating loss for the financial year ended 30 June 2017, in the order of $7m'

Enough said - i think Mr Coulter has no idea what's going on, maybe too much honey mead made him slightly delusional

First down grade $10m-$12m and this downgrade $12m-$14m. It's amazing the share price has collapsed completely. Maybe hope is a strategy

Winner, I have been thinking about this overnight. What is truly shocking about this latest downgrade is this.
1. Its larger than the first downgrade which went from $17.1m to $5-7m = $17.1 - $6m (at the mid point) = $11.1m Current downgrade is 6m profit to ~ 7m loss = $13m
2. The first downgrade came after they essentially already had a very good handle on the first half loss and already had a very good handle on the severe weather effects affecting the company's honey harvest this year and also the severe effects of the Chinese regulatory changes and came just on 3 months after the initial forecast.
3. Nothing material has really changed in just over two months since their 23 January 2017 announcement, other than the positive announcement of the Chinese regulatory flip-flop the other day.
Weather has played out as they expected, honey harvest has played out as they expected...but we get a whopping $13m downgrade just on two months later after they already knew all the negatives and should have been able to reliably factor those in properly on 23 January !

My conclusions:-

1. No credibility whatsoever can be attached to any attempt that management make to forecast, either the current attempt or any future attempt. Total amatures.
2. Forecasting should be conservative and based on quantifiable data. You cannot tell me that at some stage between 23 January 2017 and yesterday they didn't already know that they would struggle to make the January forecast, I simply don't believe it.
2b - I believe they have been in breech of their continuous disclosure requirement obligations at some point in the last two months but proving this would be extremely difficult.
2c There may be serious questions regarding their internal control and internal financial reporting systems as to their timeliness, adequacy and fitness for purpose.
3.I agree that Mr Coulter has no idea whatsoever, he should resign, his performance all year has been a complete disgrace and this company is presently best described as being in disarray.
4. His resignation and getting some fresh idea's and proper prudent management skills on board might avoid this company's financial performance becoming a complete fiasco in future.
5. I doubt they have done anywhere near enough cost cutting and restructuring. They've been behind the eight ball all year and really need to get far more proactive and ahead of the curve. Maybe their new J.V. partner in China will help them but I wouldn't put money on it !
6. I won't be back at any price as I have no confidence whatsoever in management or the directors ability to govern and discharge their responsibilities to shareholders properly.
7.This company deserves to be savaged a lot more harshly than TIL which has more than halved from its SP peak.
8. Not that I would buy at any price but presently I see no reason why this share should be any more than the base it built about three years ago, about $3.90 - $4.00.

Disc: Purged my shareholding now purged my spleen venting about it !

[sb9]

Well done Roger on your tough decision to exit your position from this.

[Joshuatree]

Posted by Ogg
http://www.stuff.co.nz/business/farm...ey-study-finds (http://www.stuff.co.nz/business/farming/88007642/australian-honey-at-least-as-potent-as-nzs-manuka-honey-study-finds)


Thanks Ogg. over 82 species of leptospernum manuka in Aus to our 1 and some varieties(16%) having more UMF!. Serious comp alright and what ;vast acreages there.? And dismissing it as not a threat by saying "global demand is outstripping supply" is a bit flippant?.More supply( an explosive growth?) at higher grades from Aus could well lower prices here.

Im not a betting man but am imagining Aussie going hell for leather placing 1000's of hives (season depending) around their multitudes of hectares of newfound superior manuka to cash in on what was NZ's exclusive point of difference and Comvitas huge moat, UMF honey. And when that production comes on stream ; well how well will pricing hold up then.

[bull....]

you think it would go lower than the last downgrade low of $6

[Joshuatree]

No idea just surmising future ahead and poss challenges.

Maybe i could take up the life of a shorter:D

[kiora]

Sad really.From couldn't do anything wrong to this :confused:

[winner69]

You'd think Comvita would take these things down from their website

http://www.comvita.co.nz/_assets/Investors/Financial-News/Year-ended-31-June-2017/Edison%20May%202016.pdf


Forecast F17 NPAT $17m odd .......valuation over $13

[JayRiggs]

You'd think Comvita would take these things down from their website

http://www.comvita.co.nz/_assets/Investors/Financial-News/Year-ended-31-June-2017/Edison%20May%202016.pdf


Forecast F17 NPAT $17m odd .......valuation over $13

It's very telling how Edison haven't updated their research reports of late.
After giving CVT such high valuations, it'd be a bad look to talk about CVT's multiple downgrades.

I think I read somewhere that Comvita are paying Edison to do their research.

[BlackPeter]

You'd think Comvita would take these things down from their website

http://www.comvita.co.nz/_assets/Investors/Financial-News/Year-ended-31-June-2017/Edison%20May%202016.pdf


Forecast F17 NPAT $17m odd .......valuation over $13

maybe they want to get their money back from Edison ;) ... and as long as Edison does not pay they leave their embarrassing analysis up in the open.

[stoploss]

It's very telling how Edison haven't updated their research reports of late.
After giving CVT such high valuations, it'd be a bad look to talk about CVT's multiple downgrades.

I think I read somewhere that Comvita are paying Edison to do their research.

One of the dangers of paid research . CVT now in a position that they maybe can't pay for further "research " .

[Beagle]

Coulter should do the right thing and fall on his sword. Its obvious now he has no idea how to manage this company through fundamental changes.
Paid the big bucks and he's made a complete fiasco of his handling of the challenges facing the company.
Time to hire some genuine talent and time for some fresh clean sheet thinking. His handling of the crisis this company faces should be a complete embarrassment to any competent board.

[BlackPeter]

Just updated my numbers on CVT. Based on the recent 4 traders consensus it is now a company with a forward PE of 46, a forward CAGR of 14 (if anybody still believes in the story) and with (that's not from 4-traders, but my personal view) a clueless management. Recommendation downgraded to "hold". Personally I would see that as still ways too optimistic ... not sure yet, whether I would buy into this share for half of its current share price (which still would result in an amazing high PE of 23).

It must be all about faith ... but hold on, isn't this the sticky honey sector ;)?

[JoeGrogan]

I seriously cannot believe that the sp is holding in the 7's, i was sure it would take a massive pounding. Especially since companies like TIL and MPG have practically halved their sp highs, and yet they are not reporting massive losses. I guess the market is satisfied that this is a one off result? i guess time will tell.

[Beagle]

I seriously cannot believe that the sp is holding in the 7's, i was sure it would take a massive pounding. Especially since companies like TIL and MPG have practically halved their sp highs, and yet they are not reporting massive losses. I guess the market is satisfied that this is a one off result? i guess time will tell.

I can't either. The amount of "creative public relations investor speak" that's come from management lately, this thing should be half its current price.
I think there's a belief that the science is good and this must come right in the long run. Whether current management can manage their way through to better things in the long run properly is an open question as far as I am concerned. In my opinion Scott Coulter has made a real fiasco of the challenges facing this company ever since those challenges emerged nearly a year ago.
No way he gets to manage my financial interests again. He's on the same list as Norah Barlow as far as I am concerned. Their forecasting ability is truly woeful, possibly one of the very worst examples of gross inaccuracy I can recall in over 30 years of investing.

[Vaygor1]

I can't either. The amount of "creative public relations investor speak" that's come from management lately, this thing should be half its current price.
I think there's a belief that the science is good and this must come right in the long run. Whether current management can manage their way through to better things in the long run properly is an open question as far as I am concerned. In my opinion Scott Coulter has made a real fiasco of the challenges facing this company ever since those challenges emerged nearly a year ago.
No way he gets to manage my financial interests again. He's on the same list as Norah Barlow as far as I am concerned. Their forecasting ability is truly woeful, possibly one of the very worst examples of gross inaccuracy I can recall in over 30 years of investing.

Pretty strong statements there Roger.. can't say I disagree with any of it. Regarding your last sentence I thought RAK have consistently out-performed CVT on the woeful forecasting/guidance index.

[Beagle]

Pretty strong statements there Roger.. can't say I disagree with any of it. Regarding your last sentence I thought RAK have consistently out-performed CVT on the woeful forecasting/guidance index.

No point mucking about with being Mr nice guy overtly politically correct. Might as well call it as you see it mate.
Something new for poor beleaguered CVT shareholders to worry about. http://www.radionz.co.nz/news/national/330097/pohutukawa,-manuka-and-feijoa-under-threat
SP down ~ 10% already today. My opinion. Some people, (myself included for a while) forgot the risks of this agri stock, among them is pestilence.
I have always said a PE of only 10 is applicable to agri stocks because of the multitude of risks involved including spells of extremely difficult weather.
Factor in an inexperienced CEO and a board who appear to have only tinkered at the margins with restructuring, major issues with counterfeit product in China, a severe over concentration of dependence on the China market, (~ 60% of sales) and shareholders better strap themselves in as it appears the headwinds looks set to continue.

[sb9]

No point mucking about with being Mr nice guy overtly politically correct. Might as well call it as you see it mate.
Something new for poor beleaguered CVT shareholders to worry about. http://www.radionz.co.nz/news/national/330097/pohutukawa,-manuka-and-feijoa-under-threat
SP down ~ 10% already today. My opinion. Some people, (myself included for a while) forgot the risks of this agri stock, among them is pestilence.
I have always said a PE of only 10 is applicable to agri stocks because of the multitude of risks involved including spells of extremely difficult weather.
Factor in an inexperienced CEO and a board who appear to have only tinkered at the margins with restructuring, major issues with counterfeit product in China, a severe over concentration of dependence on the China market, (~ 60% of sales) and shareholders better strap themselves in as it appears the headwinds looks set to continue.

Couldn't agree more there Roger, heard that on Radio myself. Might see the sp with $5 handle soon.

[Ghost Monkey]

Looking at the SP today it seems more than a few may have heard that report on the radio!

[dobby41]

Looking at the SP today it seems more than a few may have heard that report on the radio!

It was on the TV news and in the paper this morning.

[bull....]

you think it would go lower than the last downgrade low of $6

been waiting

[Newman]

It will take a long time for the disease to establish. Temperature, moisture, and other factors have to be in perfect combination to favour the disease.

[dobby41]

It will take a long time for the disease to establish. Temperature, moisture, and other factors have to be in perfect combination to favour the disease.

It's in Tasmania so that is a good (bad) sign that most of our countries conditions will suit.

[hardt]

Supports wont hold as the fundamentals have changed, this is not the year for CVT... hope things pick up next year.

disc. not holding

[Beagle]

http://www.sharechat.co.nz/article/366058e6/comvita-shares-slump-9-4-on-deutsche-bank-downgrade-news-of-myrtle-rust-in-nz.html?utm_medium=email&utm_campaign=Comvita%20shares%20slump%2094%20on%20 Deutsche%20Bank%20downgrade%20news%20of%20Myrtle%2 0Rust%20in%20NZ&utm_content=Comvita%20shares%20slump%2094%20on%20D eutsche%20Bank%20downgrade%20news%20of%20Myrtle%20 Rust%20in%20NZ+CID_a2392094480f03fb6608f79bb0e99ff 7&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle366058e6comvit a-shares-slump-9-4-on-deutsche-bank-downgrade-news-of-myrtle-rust-in-nzhtml

I reckon you can take their price target with a grain of salt / sugar?

[janner]

It will take a long time for the disease to establish. Temperature, moisture, and other factors have to be in perfect combination to favour the disease.

All the more reason to eradicate it before it can establish...

[peat]

http://www.sharechat.co.nz/article/366058e6/comvita-shares-slump-9-4-on-deutsche-bank-downgrade-news-of-myrtle-rust-in-nz.html?utm_medium=email&utm_campaign=Comvita%20shares%20slump%2094%20on%20 Deutsche%20Bank%20downgrade%20news%20of%20Myrtle%2 0Rust%20in%20NZ&utm_content=Comvita%20shares%20slump%2094%20on%20D eutsche%20Bank%20downgrade%20news%20of%20Myrtle%20 Rust%20in%20NZ+CID_a2392094480f03fb6608f79bb0e99ff 7&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle366058e6comvit a-shares-slump-9-4-on-deutsche-bank-downgrade-news-of-myrtle-rust-in-nzhtml

I reckon you can take their price target with a grain of salt / sugar?
thats an interesting article with Deutsche and Williamson speaking out on this

[jonu]

All the more reason to eradicate it before it can establish...

Spoke to a DOC coordinator this morning and she told me no more myrtle rust has been found outside the original nursery...6 days gone since first found. This is unofficial but good news all the same

[Beagle]

http://www.msn.com/en-nz/news/national/myrtle-rust-no-longer-contained-mpi/ar-BBAQwgw?li=AAaUOAg&ocid=spartandhp

Sorry Jonu, that's not what's being currently reported in the media.

[jonu]

Only relaying what was said to me this morning. Sounds like another nursery. I specifically asked her if any had been found in the wild and she said no

[whatsup]

If it was blown over here by the wind, which is what we all understand is the case then its only time before more is found imo, sorry !

[jonu]

If it was blown over here by the wind, which is what we all understand is the case then its only time before more is found imo, sorry !

Don't be sorry Whatsup! What for?

I think there has been a big over reaction to this in relation to CVT. There has been no impact on honey production in Oz on their lepto species in the time that it has been there (See last Friday CVT release)

[Beagle]

Big under reaction to other factors affecting CVT lately IMO. Net-net - Still a big under reaction and my view is there's plenty of reasons and plenty of room for the stock to track south from here.

[jonu]

Digging for a bone with some meat on it Roger? You'll have to talk it down some more!

[Beagle]

Digging for a bone with some meat on it Roger? You'll have to talk it down some more!

LOL the hounds bored with it mate and tired of digging here. Too many dreamers still believe the pot of manuka honey gold myth.

[whatsup]

Don't be sorry Whatsup! What for?

I think there has been a big over reaction to this in relation to CVT. There has been no impact on honey production in Oz on their lepto species in the time that it has been there (See last Friday CVT release)


jonu, Im sorry for the country and farmers, living off the land is a very very hard occupation, currency, weather, markets, public perception, govt regulations, OSH et al and now this 10 years of hard work can be blown away through no fault of theirs , just remember the kiwi fruit's PSA !!

[Marilyn Munroe]

LOL the hounds bored with it mate and tired of digging here. Too many dreamers still believe the pot of manuka honey gold myth.

I have an acquaintance who is an established bee keeper. He can't wait for the claim jumpers with gold fever to exit the industry.

Boop boop de do
Marilyn

[Beagle]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11851690

[Joshuatree]

"We understand when myrtle rust arrived in Australia in 2010 there were concerns about the impact it might have on honey production. However, to date there seems to have been no effect."

[Balance]

LOL the hounds bored with it mate and tired of digging here. Too many dreamers still believe the pot of manuka honey gold myth.

Word from one very reputable beekeeper is that there will be a massive shakeout in the manuka honey industry.

He has been involved in the industry for decades in the Hawkes Bay region and believes that a huge amount (at least 50%) of the manuka honey in storage out there is adulterated and of low quality. The new testing regime (involving 5 rather than 3 markers) will render the adulterated honey into relatively low value multi-flora honey.

How many people out there know that UMF level can be artificially boosted in the short term via heat treatment for eg?

Best to keep clear until the honey bees stop buzzing for a while!

[Joshuatree]

Watching this unfold. You'd think Comvita would have the rigid quality testing regime etc in place and that this will shake out and eliminate the shady cowboys and put Comvita in strong position to clean up . Ive heard another way of increasing UMF is to age the honey.

[Balance]

Watching this unfold. You'd think Comvita would have the rigid quality testing regime etc in place and that this will shake out and eliminate the shady cowboys and put Comvita in strong position to clean up . Ive heard another way of increasing UMF is to age the honey.

That's the conventional way to increase the UMF - provided the right active ingredients are in the honey in the first place. Was hit and miss in the old days but now, proper testing and vetting of honey active ingredients mean that top prices are paid for the manuka honey with the real stuff in them.

Comvita shares the industry problems - but should emerge as a leading player once the current mess is sorted out.

Meanwhile, check the sugar content in your honey when you buy! Plenty of that going on as well!

[kiwidollabill]

Watching this unfold. You'd think Comvita would have the rigid quality testing regime etc in place and that this will shake out and eliminate the shady cowboys and put Comvita in strong position to clean up . Ive heard another way of increasing UMF is to age the honey.

Who says CVT are any more honest than the others?

[Joshuatree]

Their fairly long proven history being a health foods manufacturer and exporter; you have to be a best in breed at this sort of thing. Neil Craig i rate very highly. While I'm not closely following it looks to have been wide open to abuse with the lack of clarity re UMF testingregs etc , naturally some would take advantage of this; hopefully now its robust and accurate enough to stop that; although i heard on the radio just now some honey tested with no manuka sources tested as UMF! Hopefully a teething prob. have you got some info on Comvita kiwidollabill?

[Balance]

Their fairly long proven history being a health foods manufacturer and exporter; you have to be a best in breed at this sort of thing. Neil Craig i rate very highly. While I'm not closely following it looks to have been wide open to abuse with the lack of clarity re UMF testingregs etc , naturally some would take advantage of this; hopefully now its robust and accurate enough to stop that; although i heard on the radio just now some honey tested with no manuka sources tested as UMF! Hopefully a teething prob. have you got some info on Comvita kiwidollabill?

Wait for the government imposed tests and standards to really take effect.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11844280

[kiwidollabill]

Some more 2c...

Those MPI standards are largely political - notice that none of the parameters are the same as the UMF. Also, none of the chemical markers have any antibacterial activity... kinda ironic since thats the original reason why Manuka is so valuable.

I think the DNA testing is a good inclusion, however providing the kanuka test as an 'optional' rather than a standard is done to placate some of the SI beekepers.

I've posted previously about how sugar feeding leads to crap honey which fails import tests into certain countries - CVT arent any different in this area.

Quite a few posters have mentioned the large amount of low quality stock sitting around, we all saw the large level of inventories in the last set of financial statement with the associated 'window dressing' excuses. It'll be interesting to see how this changes to the next reporting period.

[sb9]

Well, sp right on $6 as I type, soon to be with $5 handle...

[Beagle]

Now $5.99. Worth noting that for much of 2014 and 2015 it traded around the $3.90 mark when the companies position was far better, it was growing strongly, EPS positive, counterfeit product wasn't such a problem, it wasn't holding vast amounts of low quality product it couldn't sell and its forecasting then had credibility and further, it wasn't incurring losses or staring down the barrel of a potential myrtal rust outbreak. Why anyone would think its worth any more than $3.90 now is light years beyond my comprehension. I really don't get it why the SP hasn't fallen off the face of a cliff, it certainly deserves too ! The way they're headed though, they'll be out of the NZX50 soon enough and possibly worth noting that the stock put on 20% when it got included in the index in the first place.

[Blackrose]

I am feeling irate at this stock. Seriously I am PMSing over my CVT shares. Fark me. Last year I got sold the story - sells to China, good for bees good for the environment, eco-green shares... only to see it stumble down from double digit figures to single low ones.

I would cuss some more and blame our stupid hippy lefty tendencies that tend to blind one to specifics of the deal, but you know I can hear the chuckling from aged brokers over at the Fisher Funds who are probably sipping Mimosas on the deck of their Takapuna based office and chucking away rubbing their bellys.

But Fark me. SERIOUSLY??? Ok I sorta forgave them for the failure of establishing a proper trading channel to China that the communists would not routinely shake down, but honestly an Australian imported Fungus?

So what now? Well thankfully the chick next to me on my spin class did go on and on about diversification, so the plastic bewb funds, freeze my eggs fund as such remain unaltered just with a dent in it.

But what do we do with a bunch of CVT shares? Do we grind it out and wait for a recovery given that CVT is a market leader and all the other smaller honey producers will be up against the same issue? Is it a case of the larger one can survive as it has enough "fat" on it where as smaller Honey Producers that can't cope with a 2 year down turn will go to the wall quicker thus preserving the story of why I purchased CVT in the first place?

Will the boffins at MPI get their **** together and tell us how far this thing has spread? After all the varoa mite and other various jump scares have been a feature with this trade so there is that. Grouchy vegan whole foods stockists still stock this product along side the mung beans because of it's "health food properties" and have done so for decades after all. Also since this is the same story for anything to do with Dairy Farming (2 years in the hole, big question marks over what will survive) is it a case of chill out and give it a miss?

Advice Please.

[sharp]

I am feeling irate at this stock. Seriously I am PMSing over my CVT shares. Fark me. Last year I got sold the story - sells to China, good for bees good for the environment, eco-green shares... only to see it stumble down from double digit figures to single low ones.

I would cuss some more and blame our stupid hippy lefty tendencies that tend to blind one to specifics of the deal, but you know I can hear the chuckling from aged brokers over at the Fisher Funds who are probably sipping Mimosas on the deck of their Takapuna based office and chucking away rubbing their bellys.

But Fark me. SERIOUSLY??? Ok I sorta forgave them for the failure of establishing a proper trading channel to China that the communists would not routinely shake down, but honestly an Australian imported Fungus?

So what now? Well thankfully the chick next to me on my spin class did go on and on about diversification, so the plastic bewb funds, freeze my eggs fund as such remain unaltered just with a dent in it.

But what do we do with a bunch of CVT shares? Do we grind it out and wait for a recovery given that CVT is a market leader and all the other smaller honey producers will be up against the same issue? Is it a case of the larger one can survive as it has enough "fat" on it where as smaller Honey Producers that can't cope with a 2 year down turn will go to the wall quicker thus preserving the story of why I purchased CVT in the first place?

Will the boffins at MPI get their **** together and tell us how far this thing has spread? After all the varoa mite and other various jump scares have been a feature with this trade so there is that. Grouchy vegan whole foods stockists still stock this product along side the mung beans because of it's "health food properties" and have done so for decades after all. Also since this is the same story for anything to do with Dairy Farming (2 years in the hole, big question marks over what will survive) is it a case of chill out and give it a miss?

Advice Please.

SWOT analysis...

What are CVT's strengths, weaknesses, opportunities and threats?

Does CVT have competitive advantage against its direct and indirect competitors? (Other words, is CVT surrounded by a moat from its threats?)

Is the business scalable? How easy is it replicate CVT's business?

Go down to your local honey store and compare products and prices and determine for yourself whether you would choose CVT over any other brand on the shelf...

[Beagle]

Blackrose - I understand your frustration I really do. I have held these shares. My thoughts are outlined in the posts in the previous pages and above. In summary how this company has managed itself has been pretty much an unmitigated disaster and I have lost confidence in management and this is now badly exacerbated by climatic and pestilence factors. I see no reason why these should trade at any more than the $3.90 level they were as little as two years ago, in fact I see plenty of reasons why they should trade at a lower level than that ! Plenty more pain to come. I have SOLD all my shares in CVT.

[Blackrose]

Cheers Rodger.

I think at the long end of it I will white knuckle my way out of this. I ruefully acknowledge that shares and picking you will get egg on one's face and it is a bit like that. This is my first real reversal since I started share trading. I will probably sell at some sort of loss - eventually but I don't have to make that call "Right Now." I can give it another 18 months - 2 year to wriggle out.

I can grind this out I think but it is the biggest basket case in my portfolio at the moment. Grrr. Still I got the dividend early this year so I was happy with that.

As for "Sharp" - I do appreciate the Warren Buffet advice about moats and SWOT and all that, very 80s mate - blue striped shirts and power suits ahoy. Did I also detect a touch of Havard Business Review Drucker thrown in for good measure? Mmm sexy.

CVT's main strength was in Feb this year the Price per earnings was around 15.7 and gross yield 3.6% Retail confidence in China for the grumpy clean eating health food contingent that eat this stuff from health food shops.
The weaknesses are global warming being what it is; and NZ having various storms and rain meant the bees went on smoko and never came back, then the boffins and MPI discovered a fungus. Things that are concrete and realizable fixes that have a direct impact on share price. Unlike - say really hard to trouble shoot crap like "weak consumer sentiment."

So Rodger is right that I am a complete masochist here with these shares - well that's share markets for you.

[kiwidollabill]

More news from the coalface.....

So there is a bit of a messup with the new suite of MPI tests for manuka export.....

The suite is consists of a series of chemical plus a DNA test (to confirm that manuka pollen is present). It has been found by the commercial providers of this test that high grade Manuka (15+) is failing this test - likely due to Manuka chemicals binding to the DNA and preventing detection (I believe there is old literature around this). Talking with a few people I dont believe MPI did their work correctly in validating the test for commercial use. There are naturally alot of very angry people in the industry as drums of highgrade manuka is now essentially worthless as they wont be able to be released for export under the current guidelines.

Look out for another kick in the guts to CVT

[Beagle]

Cheers Rodger.

I think at the long end of it I will white knuckle my way out of this. I ruefully acknowledge that shares and picking you will get egg on one's face and it is a bit like that. This is my first real reversal since I started share trading. I will probably sell at some sort of loss - eventually but I don't have to make that call "Right Now." I can give it another 18 months - 2 year to wriggle out.

I can grind this out I think but it is the biggest basket case in my portfolio at the moment. Grrr. Still I got the dividend early this year so I was happy with that.

As for "Sharp" - I do appreciate the Warren Buffet advice about moats and SWOT and all that, very 80s mate - blue striped shirts and power suits ahoy. Did I also detect a touch of Havard Business Review Drucker thrown in for good measure? Mmm sexy.

CVT's main strength was in Feb this year the Price per earnings was around 15.7 and gross yield 3.6% Retail confidence in China for the grumpy clean eating health food contingent that eat this stuff from health food shops.
The weaknesses are global warming being what it is; and NZ having various storms and rain meant the bees went on smoko and never came back, then the boffins and MPI discovered a fungus. Things that are concrete and realizable fixes that have a direct impact on share price. Unlike - say really hard to trouble shoot crap like "weak consumer sentiment."

So Rodger is right that I am a complete masochist here with these shares - well that's share markets for you.

Good luck. Management have a VERY long road to hoe to restore their credibility in my opinion.

[sharp]

Cheers Rodger.

I think at the long end of it I will white knuckle my way out of this. I ruefully acknowledge that shares and picking you will get egg on one's face and it is a bit like that. This is my first real reversal since I started share trading. I will probably sell at some sort of loss - eventually but I don't have to make that call "Right Now." I can give it another 18 months - 2 year to wriggle out.

I can grind this out I think but it is the biggest basket case in my portfolio at the moment. Grrr. Still I got the dividend early this year so I was happy with that.

As for "Sharp" - I do appreciate the Warren Buffet advice about moats and SWOT and all that, very 80s mate - blue striped shirts and power suits ahoy. Did I also detect a touch of Havard Business Review Drucker thrown in for good measure? Mmm sexy.

CVT's main strength was in Feb this year the Price per earnings was around 15.7 and gross yield 3.6% Retail confidence in China for the grumpy clean eating health food contingent that eat this stuff from health food shops.
The weaknesses are global warming being what it is; and NZ having various storms and rain meant the bees went on smoko and never came back, then the boffins and MPI discovered a fungus. Things that are concrete and realizable fixes that have a direct impact on share price. Unlike - say really hard to trouble shoot crap like "weak consumer sentiment."

So Rodger is right that I am a complete masochist here with these shares - well that's share markets for you.

I'm impressed Blackrose that you know all these references! Genuinely, bigly, impressed!

Maybe very 80s, as you say, and academic but am a strong believe with SWOT analysis and all... unless I'm just riding the gravy train... which I do from time to time to make a quick buck... then to pay my dues to the govt at the end of the tax year.

[Balance]

CVT's main strength was in Feb this year the Price per earnings was around 15.7 and gross yield 3.6% Retail confidence in China for the grumpy clean eating health food contingent that eat this stuff from health food shops.


That was an illusion - the company had no idea how it was tracking as demonstrated by yet another profit downgrade in April (in fact, not a downgrade but a cliff face fall into loss) after the downgrade in Jan.

[Beagle]

That was an illusion - the company had no idea how it was tracking as demonstrated by yet another profit downgrade in April (in fact, not a downgrade but a cliff face fall into loss) after the downgrade in Jan.

Their latest shock "off the face of a cliff downgrade " when all the factors driving that should and indeed were known at the time of their January downgrade tells me these guys have EXTREMLY SERIOUS issues with their forecasting methodologies.

[Blackrose]

Heya Sharp - thanks :) I hope that was taken with a wry smile, the 80s was a thing, and I was smiling when I was typing that.

Rodger, and Balance - you both have valid points. Clearly the management team could do with a new broom and some backside lashings. I'm also bothered by the down grades with no heads up to anyone either.

Anyway drinks and D&D with the boys. Have an awesome Friday Folks!

[Balance]

http://gisborneherald.co.nz/localnews/2792171-135/scientific-standard-for-manuka-honey-scrutinised

Watch and see.

[Gunny]

Got out a while back at $12. Didn't like the way things were going so put dollars into extra atm, hnz and sum. Will not be convinced to venture back in until I see the beginnings of a turnaround from management, not anytime soon I am thinking.

Gunny

[Balance]

Their latest shock "off the face of a cliff downgrade " when all the factors driving that should and indeed were known at the time of their January downgrade tells me these guys have EXTREMLY SERIOUS issues with their forecasting methodologies.

In one word - 'Clueless'.

Where is the accountability with this company to its shareholders? These are monumental stuff-ups, not minor mishaps.

[winner69]

In one word - 'Clueless'.

Where is the accountability with this company to its shareholders? These are monumental stuff-ups, not minor mishaps.

I was going to say maybe thats how things are done in Te Puke

But then again there are many great businesses in Te Puke

[iceman]

I was going to say maybe thats how things are done in Te Puke

But then again there are many great businesses in Te Puke

Just come down the road to SEK. Good, conservative forecasts :)

[Beagle]

In one word - 'Clueless'.

Where is the accountability with this company to its shareholders? These are monumental stuff-ups, not minor mishaps.

I couldn't agree more. We're they simply throwing darts in the staff lunchroom and wherever the dart landed... Heads need to roll before I'd ever consider investing again, (starting with the CEO).

[Balance]

https://www.nzx.com/files/attachments/258151.pdf

HUGE vote of confidence - 800 shares bought on market.

[macduffy]

I hope you typed that with a straight face, Balance!

;)

[winner69]

https://www.nzx.com/files/attachments/258151.pdf

HUGE vote of confidence - 800 shares bought on market.

It's more than Roger bought

[Balance]

It's more than Roger bought

May just persuade Roger to rethink?

:D

[Beagle]

May just persuade Roger to rethink?

:D

:lol: :lol:

[winner69]

https://www.nzx.com/files/attachments/258151.pdf

HUGE vote of confidence - 800 shares bought on market.

and Director Sarah bought 418 more shares - at least she says she has a plan

[Ogg]

http://www.stuff.co.nz/business/farming/92690960/myrtle-rust-found-at-taranaki-nursery

[Ogg]

Where's the bottom on this?

[hardt]

Where's the bottom on this?

what is the meaning of life?

[BlackPeter]

Where's the bottom on this?

Let me reformulate the question:
Why would people want to buy a share of an underperforming company with inept management and a good portion of bad luck (myrtle rust) added? A forward PE of 37 (corrected: 35, just noticed the price went down to $5.60) in combination with very questionable future growth prospects are hardly compelling reasons to buy in.

Don't think I would want to buy in at any price ... but if you push me really hard: Maybe $1.60 (equating a forward PE of 10), but this would require me to believe the analysts predictions (which I currently don't).

In my view is this a classic example of never buy (or hold) in a downtrend ...

[ados_nz]

Let me reformulate the question:
Why would people want to buy a share of an underperforming company with inept management and a good portion of bad luck (myrtle rust) added? A forward PE of 37 (corrected: 35, just noticed the price went down to $5.60) in combination with very questionable future growth prospects are hardly compelling reasons to buy in.

Don't think I would want to buy in at any price ... but if you push me really hard: Maybe $1.60 (equating a forward PE of 10), but this would require me to believe the analysts predictions (which I currently don't).

In my view is this a classic example of never buy (or hold) in a downtrend ...

Great entry opportunity at this level!





Not

[Beagle]

Let me reformulate the question:
Why would people want to buy a share of an underperforming company with inept management and a good portion of bad luck (myrtle rust) added? A forward PE of 37 (corrected: 35, just noticed the price went down to $5.60) in combination with very questionable future growth prospects are hardly compelling reasons to buy in.

Don't think I would want to buy in at any price ... but if you push me really hard: Maybe $1.60 (equating a forward PE of 10), but this would require me to believe the analysts predictions (which I currently don't).

In my view is this a classic example of never buy (or hold) in a downtrend ...

Agree 100%. Add in their total inability to forecast, (throwing darts at a dartboard would be more accurate), the fact that there's serious issues with the Govt's new accreditation program for manuka honey, major issues with counterfeit product in China, major issues with an over dependence on the one market, (60% of all the companies sales apparently end up in china), woeful under-recognition of problems to date by management, woeful public and investor relations on their part, once over very lightly indeed with a feather brush when it comes to restructuring if you can call it that last year...have I left anything out by accident...its quite possible as there's simply so many negative factors to remember !

Basically there is no price I would buy this stock at unless there is fresh blood at a board and management level and it reverts to a forward PE of less than 10, (10 is for a well managed proven agricultural company). Frankly this deserves to have its SP literally fall off the face of a cliff.

[winner69]

Was thinking a 5:1 split :D :D

That was last July when you were so excited with how Comvita was going and calling for a share split ......and do you remember I was trying to tell you things didn't actually look that right,

Share price would be just over a $ today if that split had happened .....seems about right


How things have changed

Couldn't resist bringing this up ....lol

[janner]

what is the meaning of life?


42 :-))))

[Beagle]

That was last July when you were so excited with how Comvita was going and calling for a share split ......and do you remember I was trying to tell you things didn't actually look that right,

Share price would be just over a $ today if that split had happened .....seems about right


How things have changed

Couldn't resist bringing this up ....lol

No worries mate, things sure have changed in the last ten months and I think one of the key issues is management haven't recognized the severity of how the goal posts have so dramatically shifted. Talk about being behind the eight ball ! Yes I do recall you expressed concerns regarding cash flow and slow inventory turn, (forgive me there may be other concerns you raised that I can't recall). Kudos to you :) Yes just over $1 does seem about right to me, without the split.

Why these are trading above the baseline ~ $4 they established a couple of years ago when the industry and prospects for CVT were looking a heck of a lot brighter than they are now is beyond my comprehension. Must be all those fancy DCF broker models...best we don't mention that those models are only as good as the bunch of long term guesses underpinning them...long term guesses in this industry :eek2:...management can't see past the barn door slamming them in the face why would anyone think broker analysts have better vision ?...Hmmmm.

[horus1]

I am holding . Great buy at this price

[Joshuatree]

They will stabilise and it is then the time to pick up some more which I will do. Good products .

Have you bought more since ,horus?

Being a contrarian can be very rewarding as long as you have done some serious research and joined all the dots and have the conviction this is an inefficient (out of favour atm) mkt opportunity. The other side is one can have investor bias and only see what one wants to see and also not want to crystallise a loss( a problem i still wrestle with at times). I haven't an opinion really except it looks bad chart wise,but on decreasing vol, I've been cut before with falling knives ; sentiment is very low; read these threads lol. G/luck whichever it is.

[janner]

Have you bought more since ,horus?

Being a contrarian can be very rewarding as long as you have done some serious research and joined all the dots and have the conviction this is an inefficient (out of favour atm) mkt opportunity. The other side is one can have investor bias and only see what one wants to see and also not want to crystallise a loss( a problem i still wrestle with at times). I haven't an opinion really except it looks bad chart wise,but on decreasing vol, I've been cut before with falling knives ; sentiment is very low; read these threads lol. G/luck whichever it is.

Good post JT.

Have never owned.. Even though I was very impressed with Claude many years ago...

Disc. Never owned even though impressed by Claude. Not going to own under the present set up.

[Balance]

Agree 100%. Add in their total inability to forecast, (throwing darts at a dartboard would be more accurate), the fact that there's serious issues with the Govt's new accreditation program for manuka honey, major issues with counterfeit product in China, major issues with an over dependence on the one market, (60% of all the companies sales apparently end up in china), woeful under-recognition of problems to date by management, woeful public and investor relations on their part, once over very lightly indeed with a feather brush when it comes to restructuring if you can call it that last year...have I left anything out by accident...its quite possible as there's simply so many negative factors to remember !

Basically there is no price I would buy this stock at unless there is fresh blood at a board and management level and it reverts to a forward PE of less than 10, (10 is for a well managed proven agricultural company). Frankly this deserves to have its SP literally fall off the face of a cliff.

Huge problem with adulterated manuka honey in the industry which should get found out with the new MPI testing regime.

Be interesting to get an update from Comvita how exposed it is to the problem - as in how much of the stock they are sitting on is compromised by quality issues.

Staying well clear until then.

[kiwidollabill]

Huge problem with adulterated manuka honey in the industry which should get found out with the new MPI testing regime.

Be interesting to get an update from Comvita how exposed it is to the problem - as in how much of the stock they are sitting on is compromised by quality issues.

Staying well clear until then.

To quote a well known NZ manuka honey scientist I know - "you could take a jar of every honey variety, mix them together, and the MPI criteria will say it can be sold as Manuka...."

I mentioned a few days back about the issues faced with the new MPI regime (particularly the DNA test)

[horus1]

Thanks , JT. I accumulate shares in my core companies and hold when they go up. I am reluctant to sell. I will not buy in the areas of electricity generation,telecomms , gambling, or sky tv,neither will I buy in the motor / fuel sector. I do OK and have a decent size portfolio, dont need the money which is really for my kids.

[Balance]

Buying just got even better this morning?

[Beagle]

Buying just got even better this morning?

LOL. I was just looking at the five year chart. The huge spike up from the multi year baseline of ~ $3.90 only started in May 2015 when things were looking really rosy for the industry. I can't see a single reason why it shouldn't revert to a maximum of that baseline in the foreseeable future, (really I expect that baseline to be sorely tested, perhaps down to a 5 year low of under $2.90. What happens when it almost inevitably get relegated out of the NZX50 at the next index rebalance and index tracker funds MUST sell :eek2: I think holders would be well advised to have ample stocks of medi honey on hand and their manuka infused bandages for the deep cuts likely to be inflicted by this falling knife.

[winner69]

Even if they have to take a hit sometime and write down the value of their honey stocks it will be treated as a non-cash item anyway so won't affect Normalised Profit and the future outlook

No worries

[Beagle]

LOL Winner...yeah they can just keep writing things off as non cash extraordinary items year after year just like Veritas has done and it won't have any impact on the future outlook, all good :D

[winner69]

LOL Winner...yeah they can just keep writing things off as non cash extraordinary items year after year just like Veritas has done and it won't have any impact on the future outlook, all good :D

But isn't that how corpoarate accounting works

Future expectations and cash flows drive the 'valuation' eh .... not past indiscretions

No worries

[Beagle]

Yeah that's really worked well for Veritas shareholders, they're absolutely "thrilled" with their share price !

[Balance]

$5 - $7m is their new normalized operating forecast, down from $17m three months ago....soon to be revised down to approx break even IMO.

Not like you at all, Roger - you were way out on this one!

PS. Wonder if Chinese investors had been buying CVT (cheap at $10, cheaper at $8 and even cheaper at $6 as the sp keeps dropping) but have stopped as realization sinks in that 'cheap things are not good and good things are not cheap?'

[winner69]

Cash was getting a bit low re H1 accounts - esp after a negative H1 free cash outflow of $20m odd

Suppose selling the family silver will helpout for a while

[Beagle]

Not like you at all, Roger - you were way out on this one!

PS. Wonder if Chinese investors had been buying CVT (cheap at $10, cheaper at $8 and even cheaper at $6 as the sp keeps dropping) but have stopped as realization sinks in that 'cheap things are not good and good things are not cheap?'

Yeah mate I was almost as surprised as others by the size of the second downgrade, especially when all the factors mentioned in that one were already well known to the company at the time of the first one ! I smell a large dead rat festering somewhere in their accounting or stock system. Something smells really off... The actual numbers in due course might be even more interesting ! I suspect management and directors are a little relieved to have a new excuse to keep up their sleeve to help deflect future criticism. http://www.msn.com/en-nz/news/national/myrtle-rust-spreads-to-king-country/ar-BBBqsGH?li=AA59FU&ocid=spartandhp

[Xerof]

But, thank goodness, that investment into SEA is doing really well.......ooops

As Roger says, TECHNICALLY there should be solid support at ~ the $4 level, which acted as serious resistance on the way up, so lets see what happens when it gets to that level

[Beagle]

Technically there could be support at that level Xerof but fundamentally with the stock still selling even at today's price on a PE of 25 based on last year's solid result, who knows how many years its going to take them to get back to last years profitability ????? and even then if one ascribes a traditional PE for the agricultural sector of 10 we could still be a very long way off the bottom. Management have it all ahead of them to restore their credibility, A LOT of work to do.

[Xerof]

Yes TA basis only, edited my post, and I agree with the rest of your post Roger.

Apparently, a Moose and Myrtle have allegedly been found to be as far south as the Manawatu Gorge. Not reported by the media yet - could be bigfoot though

[Balance]

Yes TA basis only, edited my post, and I agree with the rest of your post Roger.

Apparently, a Moose and Myrtle have allegedly been found to be as far south as the Manawatu Gorge. Not reported by the media yet - could be bigfoot though

Like the sharemarket CVT selling/offer depth, deceptively small but the underlying numbers are much much bigger?

[Xerof]

1.5% of shareholders hold 89% of the shares Balance, so liquidity is intensely problematic. If one green bottle......

[Balance]

1.5% of shareholders hold 89% of the shares Balance, so liquidity is intensely problematic. If one green bottle......

Yup - can understand why a novice looking at the sell depth thought buying at $6.50 was a good sure thing - lots of small lots buying and appeared to be only 1 small seller!

The moose was only showing its tail!

[Beagle]

http://www.msn.com/en-nz/news/national/purest-m%C4%81nuka-failing-new-honey-standards/ar-BBBEziq?li=AAaUOAg&ocid=spartandhp

[BlackPeter]

http://www.msn.com/en-nz/news/national/purest-m%C4%81nuka-failing-new-honey-standards/ar-BBBEziq?li=AAaUOAg&ocid=spartandhp

You sort of wonder why 20% of their "best" manuka honey does not pass the test.

I guess - sure, the test could be unreliable, but for that to decide it would be interesting how the cheap supermarket honey would do?
Are really all producers reporting this 20% fail rate?
Maybe it is just related to the bees getting a bit too much sugar as replacement feed? Or maybe it depends on in what time of the year they collected the honey? Or maybe some beekeepers (or bees ;)) can't distinguish between manuka and kanuka?

How do they know anyway what their "best" honey is? Is it just the honey with the flashest label and the highest price, or how else do they measure "best"?

How is "best" for the producer relevant for the consumer? How is a pass in the test relevant for the consumer (i.e. do they get something measurably better or is this like homeopathie?

So many questions - and so much black magic ... glad I didn't put my money into this industry ...

[kiwidollabill]

http://www.stuff.co.nz/business/farming/93134861/ministry-for-primary-industries-too-big-and-putting-manuka-honey-at-risk--labour

"When you go through a new testing regime you need to adjust laboratory methods to take account of samples that behave differently - it's part of a normal process."

What an utter load of rubbish, that is not how you develop new testing - all the validation is suppose to be done up front so there aren't issues like this.

To get into the techy detail of what is happening, the high UMF Manuka honey is failing the DNA test - it is believed by industry participants that the high levels of MGO in top grade manuka is binding to any DNA left in the honey and hence preventing detection in the test. I hear rumors in some of MPIs validation process which could have lead to this getting through.

[Beagle]

You sort of wonder why 20% of their "best" manuka honey does not pass the test.

I guess - sure, the test could be unreliable, but for that to decide it would be interesting how the cheap supermarket honey would do?
Are really all producers reporting this 20% fail rate?
Maybe it is just related to the bees getting a bit too much sugar as replacement feed? Or maybe it depends on in what time of the year they collected the honey? Or maybe some beekeepers (or bees ;)) can't distinguish between manuka and kanuka?

How do they know anyway what their "best" honey is? Is it just the honey with the flashest label and the highest price, or how else do they measure "best"?

How is "best" for the producer relevant for the consumer? How is a pass in the test relevant for the consumer (i.e. do they get something measurably better or is this like homeopathie?

So many questions - and so much black magic ... glad I didn't put my money into this industry ...
So many questions.... Came back from the movies the other night and was felling pretty poorly coughing and what not. Had a couple of sandwiches with plenty of that cheap supermarket honey on them for supper and a glass of milk, (lest we forget how blessed we are, we live in the land of milk and honey :) ), had a good sleep and woke up the next morning feeling absolutely fine...makes you wonder doesn't it...guess I could have used some of that extremely expensive UMF15+ manuaka honey and would probably have got the same result.
At times like this with so much heresay, theory, conjecture and speculation, sometimes it pays to reference the gold standard of truth...
http://bible.knowing-jesus.com/topics/Honey
26 verses in the Bible telling you honey is good for you and not a single reference to Manuaka honey being even better... Hmmm

[winner69]

Relevant to this forum of late

Proverbs 16:24 - Pleasant words are a honeycomb, Sweet to the soul and healing to the bones.


Proverbs 25:27 - It is not good to eat much honey, Nor is it glory to search out one's own glory.

Thanks to Roger post above

[Beagle]

Good extracts indeed Winner.
It would seem that the reality of the impact of what's close to a perfect storm of events affecting CVT is finally starting to have some more meaningful effect on the SP although I would hasten to add that it was less than $4 a couple of years back when the robustness of their business model looked significantly more sound.
Not sure why the market is still pricing this above a figure when times looked far better....probably those fancy DCF broker forecasts assuming everything is going to come right in the years ahead...but what if it doesn't ? After now finally more than halving from its previous lofty high of over $12, might we see the current price halve again ? Management have it all ahead of them to even prove their business model works going forward, let alone get back to an acceptable level of profitability commensurate with a $5 share price !

[ratkin]

Good extracts indeed Winner.
It would seem that the reality of the impact of what's close to a perfect storm of events affecting CVT is finally starting to have some more meaningful effect on the SP although I would hasten to add that it was less than $4 a couple of years back when the robustness of their business model looked significantly more sound.
Not sure why the market is still pricing this above a figure when times looked far better....probably those fancy DCF broker forecasts assuming everything is going to come right in the years ahead...but what if it doesn't ? After now finally more than halving from its previous lofty high of over $12, might we see the current price halve again ? Management have it all ahead of them to even prove their business model works going forward, let alone get back to an acceptable level of profitability commensurate with a $5 share price !

I seem to remember you were one of those enthusiastically buying at those "lofty levels" not so long back (Months not years). As someone who held from way back, I was more than happy to offload into that strength, as the rise from Four dollars all the way to Twelve was rather perplexing.
I warned repeatedly on this thread about the dangers of this stock and was ignored in the rush to buy, of which you were probably the most vocal advocate cheering the company on. Now you are no longer holding I see you are the most vocal in predicting it demise. What a difference a few months makes.

[Beagle]

I seem to remember you were one of those enthusiastically buying at those "lofty levels" not so long back (Months not years). As someone who held from way back, I was more than happy to offload into that strength, as the rise from Four dollars all the way to Twelve was rather perplexing.
I warned repeatedly on this thread about the dangers of this stock and was ignored in the rush to buy, of which you were probably the most vocal advocate cheering the company on. Now you are no longer holding I see you are the most vocal in predicting it demise. What a difference a few months makes.

Its been over a year since this fiasco started to unfold. Things were looking exceptionally good for strong ongoing growth 15 or so months back and the PE based on growth rates and forecasts looked compelling, (one analyst had a $14 price target at one stage). They were rapidly building critical mass and distribution challenges at that stage were unheard of. I don't think anyone could have predicted the degree and extent of the problems they've faced. Certainly the veracity of the companies own forecasting model has been brought very seriously into question. If the old adage is true that a week is a long time in politics then I think its fair to say a LOT can change in a year in business and this one of the best examples I've ever seen of that. If I remember correctly I started buying just over $7 and the vast majority of my stake was exited at over $10 as it became clear their operating environment had dramatically changed. Good on you for getting in a ~ $4 but it would have been a pretty speculative buy at that stage as profitability to an acceptable level hadn't really been proved up in a convincing manner. The problem I find with buying speculative unproven companies with lots of apparent potential is you can easily get you capital properly drilled out. Hindsight is always 20/20, what matters is the future. Where do you see the SP in 18 months time or aren't you brave enough to make a call on that ?

[IAK]

Myrtle rust found in the Bay of Plenty - not looking good for the manuka honey industry. http://www.nzherald.co.nz/rotorua-daily-post/news/article.cfm?c_id=1503438&objectid=11875363

[Joshuatree]

"We understand when myrtle rust arrived in Australia in 2010 there were concerns about the impact it might have on honey production. However, to date there seems to have been no effect."

Too early to know what effect it will have here.

[IAK]

True. Depends how much of their Manuka honey is derived from Leptospermum scoparium or the other 82 species of Leptospermum present in Australia?

[Blackrose]

Is it relevant to add, that all these problems affect Honey producers, and that CVT being one of the larger companies would be the best to withstand all the dramas and come out the other side better for it?

This is of course the biggest basket case of my portfolio. The drama queen of my pics.

[Joshuatree]

Scientists have developed a process to certify West Australian honey with medicinal and antimicrobial properties, which will rival New Zealand's famous Manuka honey

Certified medicinal honey (http://www.abc.net.au/news/rural/2017-06-23/honey-certification-in-wa-competition-with-manuka/8643762)

[Joshuatree]

Comvita being proactive negotiating with Capilano to get a slice.

icon-abc-article Liquid gold rush beckons as search begins for best antimicrobial honey (http://www.abc.net.au/news/2016-02-06/liquid-goldrush-for-australian-honey-producers/7141896)

[Blackrose]

Whew!!!

CEO Scott Coulter came out saying (and I paraphrase here)
All good - they have this problem in Tasmania.... check this out...
https://www.nzx.com/companies/CVT/announcements/303173

Shares climbed up towards the $6 mark this afternoon then settled down to $5.87 Probably in another ooh 8 months we will see if the bees want to come back to work. Fingers crossed.

[Beagle]

Why would you draw any comfort from what Scott Coulter has to say in regard to predicting the future ? Lets have a look at his track record. If I remember correctly it was about this time last year he said tax and regulatory changes in China weren't having any effect on CVT so that's a shocker predication of how things actually turned out for 2016.
Next let's have a look at his track record in 2017. In January they came out with a shocker downgrade based on horrible weather events and a dramatic downturn in sales to China but then subsequent to that even after all the shock weather event news should have been known and factored in already, came out with an absolute belter of a downgrade about another $13m from memory. Even his short term ability to predict the future has proven to be extremely unreliable so why would anyone think his ability to pick the long term effects of myrtle rust be any better !

[peat]

Why would you draw any comfort from what Scott Coulter has to say in regard to predicting the future ? Lets have a look at his track record. If I remember correctly it was about this time last year he said tax and regulatory changes in China weren't having any effect on CVT so that's a shocker predication of how things actually turned out for 2016.
Next let's have a look at his track record in 2017. In January they came out with a shocker downgrade based on horrible weather events and a dramatic downturn in sales to China but then subsequent to that even after all the shock weather event news should have been known and factored in already, came out with an absolute belter of a downgrade about another $13m from memory. Even his short term ability to predict the future has proven to be extremely unreliable so why would anyone think his ability to pick the long term effects of myrtle rust be any better !

to be fair Beagle, he is basing that view on myrtle impact on a real life outcome as per Australia so it seems a reasonable prophecy.
But that said it doesnt change my view that the problem is in the distribution lines and the integrity of the product , which I dont see MPI standards having much relevance to

[Blackrose]

For the record, this is not my favorite share pic from my portfolio. I'm gritting my teeth on this one. I would say I've been a bit burnt on this one, and there is a good chance I'll be selling at a loss eventually. We will have to see.

[macduffy]

Some big investors taking a punt on West Australian honey.

http://www.abc.net.au/news/2017-07-01/andrew-forrest-and-kerry-stokes-enter-honey-business/8669254?section=business

[Sideshow Bob]

Just in Hon Hun Station in HK on the train to Guangzhou. In the past was a reasonable size Comvita display and range of products, and sometimes with a merchandiser to try to push you into Comvita products. All gone now and only Manuka honey is Australian.

[BlackPeter]

Amazing this dog is still hanging around $6 ... despite questions about the future value of the product, big losses this year and a management team who's predictions have been proven wrong more than once in the past (actually - when was the last time they got it right?).

Ah yes, forward PE of 37.5 (only if you believe the optimistic management predictions) and a CAGR of less than 10 ...

Looking however at the bigger picture - Sp still stuck in a long and sustained downtrend (ways below MA200) ... Anybody thinking they might have bottomed out, and why? Any happy holders around (there might be - I think they started around $4 at IPO - didn't they?)?

[winner69]

FY18 loss less than what they said it might be

All honky dory for FY18

“In summary, based on an assumption of a normal 2017/18 honey production season and a partial recovery of the grey channel we would expect after tax operating earnings for FY18 to be at least equal to our after tax operating earnings of $17.1m achieved in FY16 (over the comparable 12 month period),” Mr. Coulter said.

That's a PE of about 16 - in this basis one of cheaper stocks on the NZX (relative PEs)

[Beagle]

FY18 loss less than what they said it might be

All honky dory for FY18

“In summary, based on an assumption of a normal 2017/18 honey production season and a partial recovery of the grey channel we would expect after tax operating earnings for FY18 to be at least equal to our after tax operating earnings of $17.1m achieved in FY16 (over the comparable 12 month period),” Mr. Coulter said.

That's a PE of about 16 - in this basis one of cheaper stocks on the NZX (relative PEs)

Well...yes, (putting my "being as kind as I can be hat on") on a strict arithmetic basis it is one of the cheaper stocks on the NZX with the following caveats :-
Given their record of forecasting what reliability if any can investors ascribe to this year's forecast ?, i.e. what is the real E ?
Given this forecast is predicated on fair weather conditions what PE should we ascribe to estimated earnings given this stock clearly carries intrinsic agricultural risks ?
What other risks do investors need to consider, e.g. accreditation risks, is Manuka honey really much better than any other sort of common garden variety ?
Disc: No longer own and not considering a reinvestment anytime soon.

[winner69]

Punters getting excited about the future of CVT - market cap up $30m (10%) this morning

Could easily go back above $10 - was much higher when achieving similar (expected) profits

[BlackPeter]

Punters getting excited about the future of CVT - market cap up $30m (10%) this morning

Could easily go back above $10 - was much higher when achieving similar (expected) profits

your friends from the bowling club still holding ;)?

[winner69]

Balance Sheet / Cash Flow review interesting

In spite of selling the family silver free cash flow just positive

Still have heaps of inventory (down a fraction)

But I am always intrugued to see things like trade receivables moving up $19m a year ago to $44m this year ...when revenues are way down. Regional breakdown says all owed by China .....hmmm. Probably be shot down if I speculated on way the huge rise in debtors)



At least Minister Coleman was more open on fiddling the books this morning on the radio - DHB could cut their deficits if they just lowered depreciation by assuming longer lifes of their assets

[Ogg]

"China Resources Ng Fung" bought another large parcel. It's bounced strongly from the lows and guidance is now back to normal. I can see this returning back towards the highs in the medium term. This could be the next A2 Milk.

Disc: Not holding as already fully extended elsewhere. Watching closing and hoping it doesn't run too hard before I can enter (again).

[nomis]

[QUOTE=Ogg;683520]"China Resources Ng Fung" bought another large parcel. It's bounced strongly from the lows and guidance is now back to normal. I can see this returning back towards the highs in the medium term. This could be the next A2 Milk.

Lets hope so, I didn't quite hit the low but have a average buy of $6.90 now and am happy with that and will continue to hold/buy. I do expect in the mid term that CVT will be back around $10.

[BlackPeter]

[QUOTE=Ogg;683520]"China Resources Ng Fung" bought another large parcel. It's bounced strongly from the lows and guidance is now back to normal. I can see this returning back towards the highs in the medium term. This could be the next A2 Milk.

Lets hope so, I didn't quite hit the low but have a average buy of $6.90 now and am happy with that and will continue to hold/buy. I do expect in the mid term that CVT will be back around $10.

Interesting. Just had a quick look into the numbers. Even if I take the in my view quite optimistic analyst assumptions (I guess based on the data the company provides) do i see them with a forward PE of nearly 40 and a forward CAGR of less than 15%. I guess if we believe these numbers (I don't), than they are currently fully valued. What do you expect to improve from here (higher growth or higher earnings) so that one can justify a SP of $10?

[hardt]

Interesting. Just had a quick look into the numbers. Even if I take the in my view quite optimistic analyst assumptions (I guess based on the data the company provides) do i see them with a forward PE of nearly 40 and a forward CAGR of less than 15%. I guess if we believe these numbers (I don't), than they are currently fully valued. What do you expect to improve from here (higher growth or higher earnings) so that one can justify a SP of $10?

EPS is "predicted" to fully recover by FY18 ( 38-40cps )

And assumptions are that this was a one off year for Comvita as management can't avoid a weather nuke...

Only thing to worry about is the demand remaining for Comvita products after a leave of absence for so many of their products.

Could we not expect them to pick up where they left off ( even in a muted state )? - bar another catastrophic weather cycle for apiaries across the country.

[Joshuatree]

Setting up apiaries in Aus will derisk things as well.

[Beagle]

Plenty of other players in this sector e.g. these smart operators who've been in the business for 53 years who I will pay a visit too next week when down that way. https://www.hukahoneyhive.com/recipes.html Comvita have mad a complete dog's breakfast of previous forecasting so this hound wonders why anyone would believe their latest speculative earnings guess ? What they'll really make this year or next, your guess is as good as mine and probably at least as good as management's. Its perfectly obvious to me this cyclical agriculural producer deserves a PE rating commensurate with other cyclical agri stocks based on whatever guess you might want to make regarding normalized earnings.

[winner69]

jeez share price on fire of late

nearly 9 bucks again ....might even get back to those highs of 12 bucks plus

that be good

[Joshuatree]

"Senior chemistry lecturer Dr Peter Brooks from the University of the Sunshine Coast told the ABC the chemical profiles of New Zealand mānuka honey and Australian mānuka honey were almost indistinguishable"
Australia hits back in mānuka honey standoff (http://www.radionz.co.nz/news/country/342503/australia-hits-back-in-manuka-honey-standoff)

[dobby41]

"Senior chemistry lecturer Dr Peter Brooks from the University of the Sunshine Coast told the ABC the chemical profiles of New Zealand mānuka honey and Australian mānuka honey were almost indistinguishable"
Australia hits back in mānuka honey standoff (http://www.radionz.co.nz/news/country/342503/australia-hits-back-in-manuka-honey-standoff)

I thought Manuka was a Maori word - how can the Aussie plant be a Manuka?
Might be a Leptospermum but is it a Manuka? Get your own name Aussie.

[winner69]

Radio this morning ......bees loving the warm weather so bumper honey season

Good news for Commit a

Share price back to 10 bucks next year ....but the 12 bucks of a year or so ago a step too far?

[Balance]

Radio this morning ......bees loving the warm weather so bumper honey season

Good news for Commit a

Share price back to 10 bucks next year ....but the 12 bucks of a year or so ago a step too far?

Worthwhile assessing how the game has changed as over 100 now in the UMF space with the great equalizer to come - government imposed standard.

I was in one of the health shops over the weekend and stunned by the number of brands now with UMF.

Comvita was sitting forlornly in the corner, competitors being 10% to 15% cheaper.

Interesting times ahead.

[jonu]

Radio this morning ......bees loving the warm weather so bumper honey season

Good news for Commit a

Share price back to 10 bucks next year ....but the 12 bucks of a year or so ago a step too far?

Manuka honey crop in Northland is poor again. Warm weather has come too late after a cold and windy spring. Very similar conditions through spring as last year. The rest of the country might be all right as their season is about to kick off.

Discl. Comvita employee

[Ogg]

Anyone got any info on how the season is doing this year? Alot of rain lately probably isn't helping.

[bull....]

Anyone got any info on how the season is doing this year? Alot of rain lately probably isn't helping.

this might help , looks like conditions have got softer of late

http://www.scoop.co.nz/stories/BU1803/S00172/poor-weather-conditions-hit-honey-volumes.htm

[Ogg]

It has been a lovely summer and the last of the honey boxes are being taken off the hives at the moment ready for extraction. Unfortunately it was a bit too hot for the flowers and not a lot of nectar was produced. This was a very frustrating time for the bees who are healthy and on the look out for nectar for the hive. This has meant that again we don't have as much honey as we would like but we are able to offer Raw Clover in 500g, 1kg and 2.5kg buckets.

It has been hot work in the Apiaries. The last of the honey boxes are being taken off the hives and varroa treatments going in to get the mite numbers down so the bees don't have a problem over the winter. The bees are still quite active and trying to get the last bit of honey before it gets too cold.

Got this promotional email from Bee-R-Us yesterday.

[Leftfield]

Profit downgrade and due diligence announcement today. (https://www.nzx.com/announcements/316781)

Pass the parcel to a new owner. Tricky times for holders?

[winner69]

Profit downgrade and due diligence announcement today. (https://www.nzx.com/announcements/316781)

Pass the parcel to a new owner. Tricky times for holders?

Wonder what the share price would have collapsed to if they hadnt added the bit about a possible suitor

[Ogg]

No doubt a Chinese take over.

[whatsup]

baker boys !!

[bull....]

this might help , looks like conditions have got softer of late

http://www.scoop.co.nz/stories/BU1803/S00172/poor-weather-conditions-hit-honey-volumes.htm

story was on the money. watched a good doc on netflix about fake honey from china where they use rice surup and mix it into the real honey to get the volume , totally untraceable apparently untill recently they have started using dna techniques to trace honey origin

[Beagle]

What a shocking and perennial disappointer this company has been. It would appear the company can only earn ~ $17m when all their weather stars align and in a normal weather year, (read less favorable than historical averages due to climate change) the company is somewhere around $10m which is really quite pathetic.
At the mid point of their forecast $9.5m on 45.57m shares that gives EPS of just 20.85 cps.
Now...you tell me what the right PE is given this is clearly an agricultural share with more than its fair share of risks, Murtle Rust forgotten by anyone ?
Talk of growth over the years has amounted to just that, Talk.

My standard time tested approach with cyclical argi companies is to apply a default PE of 10 and then adjust for other factors such as potential growth in various aspects of their business. In my opinion there would have to be really major synergies and cost cutting involved by any company looking to acquire Comvita to justify anything like the current share price and I note with due diligence already quite protracted there can be no assurance whatsoever regarding the possible outcome, indeed with this latest blow to their guidance on top of all the other guidance fiasco's in recent years its quite possible the potential buyer could run for the hills, I know I would !

I would rate this company a SELL.

[Balance]

No doubt a Chinese take over.

Will not happen imo.

I have observed a few China attempts at taking over or buying NZ agri-based companies like Manuka Health and Freshmax in the last few years. In both instances they weren't prepared to pay the sort of money others were prepared to pay or what the vendors wanted.

PEP will be regretting their decision to buy Manuka Health for $110m if Comvita's problems are any guide. The Chinese I believe stopped at $100m.

Freshmax is still private after the vendors decided prices offered were not high enough for their precious company - maybe the NZX can give them a higher valuation?

[percy]

Shareholders "live in interesting times."


disc.do not hold.

[Ogg]

Can someone please post the current "market depth" on CVT? I can no longer see it as I haven't traded with ASB in over 3 months, lol.

[bull....]

only 2 buyers for total 950 shares doesnt include all the buyers who remain anonomous on the sidelines

[winner69]

I hope Black Peter hasn’t got any CVT shares ...I sense another Scheme of Arrangement on the way with Directors supporting a ‘cheap’ price

No takeover forthcoming .....jeez share price will be ????

That seems a long period of due diligence .... must be serious

[Ogg]

only 2 buyers for total 950 shares doesnt include all the buyers who remain anonomous on the sidelines

lol, jesus.

[Balance]

only 2 buyers for total 950 shares doesnt include all the buyers who remain anonomous on the sidelines

800 to buy at $6.60 and 150 to buy at $6.00

[BlackPeter]

I hope Black Peter hasn’t got any CVT shares ...I sense another Scheme of Arrangement on the way with Directors supporting a ‘cheap’ price

No takeover forthcoming .....jeez share price will be ????

That seems a long period of due diligence .... must be serious

No worries - sometimes I spot a dud before I buy ;);

[winner69]

No worries - sometimes I spot a dud before I buy ;);

Nice ...well done

[Balance]

Nice ...well done

Market cap of $300m still!

Looks like the company needs perfect conditions to make $17m so put that on a PER of 12 times = $200m or $450 share price tops.

[Ogg]

I've put down a $10k buy (**cough gamble) at $6.10. Surely it won't get filled, right?

Wish me luck boys, lol.

[Beagle]

I think you're a very "brave" investor. I would not personally pay half that as I think CVT is an acronym for has Completely Violated Trust.
I can't trust a single thing management forecast and I think they have even less forward business visibility than Tegal and that's really saying something !!!!!
Why anyone would pay a PE of more than 15 ($3) for this stock is completely beyond me.

[Balance]

I think you're a very "brave" investor. I would not personally pay half that as I think CVT is an acronym for has Completely Violated Trust.
I can't trust a single thing management forecast and I think they have even less forward business visibility than Tegal and that's really saying something !!!!!
Why anyone would pay a PE of more than 15 ($3) for this stock is completely beyond me.

Too coincidental that CVT chooses to announce a potential takeover on the same day they had to announce a massive profit downgrade - case of trying to hold the sp up?

Anyone buying now or holding better hope a takeover offer eventuates!

[Beagle]

Too coincidental that CVT chooses to announce a potential takeover on the same day they had to announce a massive profit downgrade - case of trying to hold the sp up?

Anyone buying now or holding better hope a takeover offer eventuates!

Agreed, its very "Con vienient" ! Just another way directors and management are completely violating trust ? (after all if they were required to disclose this under the continuous disclosure obligations of the NZX it doesn't take a rocket scientist to understand this should have happened already).
Given there is no firm commitment from the interested party at this stage its highly debatable this needed disclosure at all.
All seems more than a little "Con trived"

[winner69]

Comvita’s Chairman Neil Craig is a highly respected and successful person

[Balance]

Peter Harris is EY's Entrepreneur of the Year.

[BlackPeter]

Peter Harris is EY's Entrepreneur of the Year.

... touche!

[Balance]

Agreed, its very "Con vienient" ! Just another way directors and management are completely violating trust ? (after all if they were required to disclose this under the continuous disclosure obligations of the NZX it doesn't take a rocket scientist to understand this should have happened already).
Given there is no firm commitment from the interested party at this stage its highly debatable this needed disclosure at all.
All seems more than a little "Con trived"

CVT share price tells an interesting story :

$9.15 in Jan 2018 and the company reported a strong half in Feb 2018 and reaffirmed its full year's forecast.

Share price went lower and lower however until it reached $6.97 at end of March - 24% decline in the absence of any 'bad' news from the company. So who had been selling and on what sort of information?

Share price then spiked to a high of $7.30 as at 10 April - less than a week ago. Highly suspicious when one considers the company now discloses that due diligence has been taking place in the background.

Then, the sp started dropping away in the last few days - just before today's profit downgrade announcement!

Interesting share price movements, one must observe?

FMA and NZX, in the interests of a transparent market, must investigate and clear Comvita and all those buying and selling shares since 1 Feb of being privy to any kind of special information.

[Beagle]

Thanks Balance. Even taking into account general market weakness in Feb / March on the face of it the SP performance does raise eyebrows especially in light of what I and almost everyone else I know of thought was a very good summer. Exactly what perfect weather conditions do they require before ever having the possibility of getting to $17m profit again ? This company has been a recidivist offender when it comes to really large profit downgrades. They must have known well before today that profit wasn't going to make their $17.1m+ forecast, surely ?

[Ogg]

CVT share price tells an interesting story :


$9.15 in Jan 2018 and the company reported a strong half in Feb 2018 and reaffirmed its full year's forecast.


Share price went lower and lower however until it reached $6.97 at end of March - 24% decline in the absence of any 'bad' news from the company. So who had been selling and on what sort of information?


Share price then spiked to a high of $7.30 as at 10 April - less than a week ago. Highly suspicious when one considers the company now discloses that due diligence has been taking place in the background.


Then, the sp started dropping away in the last few days - just before today's profit downgrade announcement!


Interesting share price movements, one must observe?


FMA and NZX, in the interests of a transparent market, must investigate and clear Comvita and all those buying and selling shares since 1 Feb of being privy to any kind of special information.


To be fair, there's probably 3 recent resons for the volatility in the share price.


1) Global sell off in equities
2) Recent unseasonal weather events lately
3) Ministry for Primary Industries regulation over Manuka Honey name.


Let's not fogret this stock was trading at $12 when, who was it, Winner69's bowling mates bought in?


What's A2 Milk at now $10b?


Seriously tho, Comvita is a great Kiwi company with a long history. The brands only is worth mega bucks.

[Filthy]

speaking of A2M....

"Alongside the expansion into South Korea, a2MC is continuing to broaden its nutritional product portfolio. In addition to new a2 Platinum® products recently announced, the company is to shortly introduce a unique and premium a2 Milk™ powder product blended with New Zealand sourced Mānuka honey"

“Comvita is party to a Confidentiality Agreement with a third party, pursuant to which a due diligence process on Comvita is being conducted. The purpose of the due diligence is to enable the third party to assess the potential acquisition of all or substantially all the shares in, or assets, of Comvita, whether by way of takeover, scheme of arrangement, amalgamation or other business combination".

Bit of a long-shot, but both announced on the same day..... lol ;)

[winner69]

Peter Harris is EY's Entrepreneur of the Year.

That’s mean - comparing the well respected Neil Craig with Peter Harris

[winner69]

I see Luke Bunt is still a director of comvita

He seems to doom many of the companies he gets involved in ..last few years at least

[Ogg]

speaking of A2M....

"Alongside the expansion into South Korea, a2MC is continuing to broaden its nutritional product portfolio. In addition to new a2 Platinum® products recently announced, the company is to shortly introduce a unique and premium a2 Milk™ powder product blended with New Zealand sourced Mānuka honey"

“Comvita is party to a Confidentiality Agreement with a third party, pursuant to which a due diligence process on Comvita is being conducted. The purpose of the due diligence is to enable the third party to assess the potential acquisition of all or substantially all the shares in, or assets, of Comvita, whether by way of takeover, scheme of arrangement, amalgamation or other business combination".

Bit of a long-shot, but both announced on the same day..... lol ;)

Wow, thanks for that.

I've raised my buy order. Quick, somebody sell to me, lol.

[Balance]

That’s mean - comparing the well respected Neil Craig with Peter Harris

Just providing some balance and perspective out there W69.

One two many executives and directors out there (ably assisted by the great unwashed and fawning journos) get an inflated sense of their 'greatness'.

[frostyboy]

I'm a hobbiest beekeeper. This seasons Honey flow came earlier than average and was much more condensed i.e it was very strong in Dec. The nectar flow in Auckland stopped early Jan. Normally it would be late Feb.

Beekeeping is local, local beekeepers know the local flowering times and probalby would base a forecast on that. I wonder if in Feb Comvita did a centralised desktop exercise of hive honey weight to date and applied historic nectar gains not considering where in the nectar cycle they were at i.e what is left to flower.

I suspect industry insiders not necesarilly comvita insiders have been selling comvita.

I think Comvitas value is in honey marketing not honey production.

[Balance]

To be fair, there's probably 3 recent resons for the volatility in the share price.


1) Global sell off in equities
2) Recent unseasonal weather events lately
3) Ministry for Primary Industries regulation over Manuka Honey name.


Let's not fogret this stock was trading at $12 when, who was it, Winner69's bowling mates bought in?


What's A2 Milk at now $10b?


Seriously tho, Comvita is a great Kiwi company with a long history. The brands only is worth mega bucks.

Like Feltex, Pumpkin Patch and CBL as brands are worth mega bucks?

Brands are only worth something when money can be made.

Accept that Comvita the company is an unmitigated disaster when it comes to being a business - lousy planning, no idea of how they are going, no real strategy and now, Comvita as a brand will lose a lot of its brand value with MPI's manuka standard imo.

[Ogg]

Like Feltex, Pumpkin Patch and CBL as brands are worth mega bucks?

Brands are only worth something when money can be made.

Accept that Comvita the company is an unmitigated disaster when it comes to being a business - lousy planning, no idea of how they are going, no real strategy and now, Comvita as a brand will lose a lot of its brand value with MPI's manuka standard imo.

You can make carpet, clothing, and sell insurance anywhere in the world. :p

[stoploss]

You can make carpet, clothing, and sell insurance anywhere in the world. :p

Sounds like they struggling to make Manuka honey in NZ , who knows if another poor season follows .Also pretty sure the same "properties " exist in honey from some of those trees in Aussie , so not really unique imo.

[Ogg]

I'm in at $6.85 :D .... (Knowing my luck it should start to fall)

[Ogg]

I'm in at $6.85 :D .... (Knowing my luck it should start to fall)

In the green already, should have got more. :t_up:

[winner69]

In the green already, should have got more. :t_up:

Well done mate ....probably on a winner here when the $8,35 takeover comes.

[Ogg]

Well done mate ....probably on a winner here when the $8,35 takeover comes.

It was that post from Filthy that did it for me. It really could be A2 Milk as it would make sense. A 1:1 all stock take over would be nice!

[Balance]

It was that post from Filthy that did it for me. It really could be A2 Milk as it would make sense. A 1:1 all stock take over would be nice!

Haha - he who dares, wins!

Well done on today!

[Beagle]

It was that post from Filthy that did it for me. It really could be A2 Milk as it would make sense. A 1:1 all stock take over would be nice!

LOL I was thinking one for six is where this should really be but you should be lucky to get any shares in such a quality company. It won't happen. Article behind the paywall specifically mentions its an overseas company that's been doing due diligence. As I said earlier this latest downgrade fiasco coming hot on the heels of all the other massive downgrade fiasco's in recent years will probably have them running for the hills. This hugely problematic cyclical agricultural stock is currently trading at 35 times this years forecast earnings.
Quite frankly I think that's absolutely ludicrous given their appalling track record and obvious weather dependency. Its a shame as some of their products are quite good but I think management have few real insights into making serious money from their current operations and I have no confidence that will change anytime soon. Put succinctly, its a flea and mange ridden mutt.

[Xerof]

I'll say it is probably the Chinese buyer who picked a fair few up a while ago, but what would I know?

[Ogg]

LOL I was thinking one for six is where this should really be but you should be lucky to get any shares in such a quality company. It won't happen. Article behind the paywall specifically mentions its an overseas company that's been doing due diligence. As I said earlier this latest downgrade fiasco coming hot on the heels of all the other massive downgrade fiasco's in recent years will probably have them running for the hills. This hugely problematic cyclical agricultural stock is currently trading at 35 times this years forecast earnings.
Quite frankly I think that's absolutely ludicrous given their appalling track record and obvious weather dependency. Its a shame as some of their products are quite good but I think management have few real insights into making serious money from their current operations and I have no confidence that will change anytime soon. Put succinctly, its a flea and mange ridden mutt.

It's a bit unfair calling it a dog with fleas. Long term trend is still good. Wasn't the last take over attempt at like $2 or something? This is definitely a difficult time for the company but that does present an opportunity for investors to take advantage of the value offered here. You gotta look at the big picture, there are 1.4B Chinese consumers looking for premium brands like this. There's tremendous global growth opportunity that keeps getting bigger. With a market cap around $300m while also making a profit, it's a fair price to pay. Especially for a company that's in advanced take over talks.

The French have champagne, Cuba has cigars. Manuka honey will always be NZ regardless. I wouldn't be buying this company if it wasn't for this "moat". You can argue that it's not as strong as it is but just look at A2 Milk, it's no longer a product but a category now - it will still be the market leader. You could argue the science is just as questionable with A2 milk as it is with Manuka honey. I don't think consumers really care, they just want quality and reputation, like fine wine.

I see $10 as a fair take over price. Call me crazy but in a world "fulled with cash", it's a small price to pay for what has been an incredible company over the last few decades. Again, if this was a "Tegal" type company, I wouldn't be buying it. This is something different and unique. Branding and reputation is extremely important, especially for the Chinese. If it drops below my buy in price I'll happily accumulate more.

[Ogg]

From the NBR today: https://www.nbr.co.nz/article/market-wrap-nz-shares-fall-comvita-rises-da-214739

Honey products company Comvita shocked the market when it announced a possible takeover without naming any potential suitor. Mr Solly says there is speculation Shenzhen-based food giant China Resources may be an interested party, given it already owns 8.3% of Comvita.

So @Beagle, was the paywall website which mentioned the "overseas company" also referring to "China Resources"? I guess that would make sense. However, it's all speculation and doesn't rule out A2 Milk or any other third party for that matter. Could be anyone, but yeah, most likely China Resources. Having said that, they are short from 10% so they can't block anyone else from buying either.

[Valuegrowth]

Weather conditions have impacted their honey production. These are sort terms issues. It may have long term growth but currently its valuation is not that attractive. In fact, I looked at their balance sheet. Comvita’s debt-to-equity ratio appears low and indicates that it still has room to increase leverage. I am currently doing some home work on future strong balance sheets firms.I like three types of companies.

Companies with growing businesses: They will build future cash
Companies having great value: If a company is very attractive on valuation, it doesn’t have to have growth as long as they are going to maintain strong balance sheet, good cash flow and maintain low debt or debt free. If they are going to have growth it is an additional bonus. Cash cows in this category will build future cash irrespective of high or low growth. I don’t expect similar growth almost every year from any company due to short term issues.
Turnaround companies

Can Convita improve their ROE and maintain growth?

[winner69]

Weather conditions have impacted their honey production. These are sort terms issues. It may have long term growth but currently its valuation is not that attractive. In fact, I looked at their balance sheet. Comvita’s debt-to-equity ratio appears low and indicates that it still has room to increase leverage. I am currently doing some home work on future strong balance sheets firms.I like three types of companies.

Companies with growing businesses: They will build future cash
Companies having great value: If a company is very attractive on valuation, it doesn’t have to have growth as long as they are going to maintain strong balance sheet, good cash flow and maintain low debt or debt free. If they are going to have growth it is an additional bonus. Cash cows in this category will build future cash irrespective of high or low growth. I don’t expect similar growth almost every year from any company due to short term issues.
Turnaround companies

Can Convita improve their ROE and maintain growth?

Aren't you struggling to get Comvita meeting any of these criteria

Whwn was the last time Comvita cash flow positive?

[Ogg]

Comvita, through their convertible notes, has the potential to lift their stake in Sea Dragon to 22%.

This is another reason why I think the "third party" could be A2 Milk, because if you look at Sea Dragons growth, "infant formula" is their highest growth demand. See graph here from the recent Sea Dragon presentation:

9625

I think what A2 Milk want to do is to secure the supply of these "special NZ ingredients", package them together, and sell them to the Asian market at a huge mark up. Just look at one of their websites (a2nutrition.com.au), A2 Milk isn't just a milk company, it's a nutrition company!

With the recent share price growth in A2 Milk, it has the leverage to be able to acquire both of these companies easily. On the other hand I doubt "China Resources" has the cash to buy Comvita outright. I could be wrong, but surely it would have lifted it's stake to 20% before making a take over?

I could be all wrong, but I'm just trying to join all the dots here. :D

[ratkin]

Do bees ever have a good productive season?

I thought they were in decline, disease ridden, hives being stolen by the truck load. Any sort of weather event has a negative impact on production.
Any company prone to looking for excuses for poor performance is in the right industry when it deals with bees.

Any slight glitch or poor management, blame it on the bees.

[Leftfield]

I think what A2 Milk want to do is to secure the supply of these "special NZ ingredients", package them together, and sell them to the Asian market at a huge mark up. Just look at one of their websites (a2nutrition.com.au), A2 Milk isn't just a milk company, it's a nutrition company!

With the recent share price growth in A2 Milk, it has the leverage to be able to acquire both of these companies easily. On the other hand I doubt "China Resources" has the cash to buy Comvita outright. I could be wrong, but surely it would have lifted it's stake to 20% before making a take over?
I could be all wrong, but I'm just trying to join all the dots here. :D

It's an interesting theory and time will tell if you are right. Good luck with that!

I would rather A2 stay a specialist diary company. A2 with Manuka honey and/or fish oil conveys a lot of v confusing unnecessary messages IMO.

[Beagle]

Ogg.
CEO specifically mentioned in the behind the paywall NBR article yesterday it was an overseas company.
Management have an absolutely appalling track record of shocking downgrades. I would concede that some of the products are very good.
What I am saying is that management have a very serious credibility issue when it comes to forecasting. Further, I believe they have very limited ability to translate the selling of very good products in enough volume at prices high enough to make this company a good earner.

What should be abundantly clear to all observers is this is a business based on agricultural products that is extremely weather dependent. Agricultural companies who are highly weather dependent for a sustainable supply of their product have traditionally almost always traded on very low PE multiples due to the cyclicality of their earnings resulting from weather cycles.
I think its clear the weather is getting more and more extreme so after two shocking seasons in a row there are no guarantees that the next one will be a good one or even representative on long term historical averages. Climate change is affecting the weather, regardless of whether people accept this or stick their head in the sand.
I repeat that the current year PE is 35. Good luck to investors buying in on that multiple.

Not saying that a Chinese or other company can't run this far more profitably with better management, in fact I think that's highly likely. Whether they remain keen after yet another savage profit downgrade is the open question.

[winner69]

Ogg.
CEO specifically mentioned in the behind the paywall NBR article yesterday it was an overseas company.
Management have an absolutely appalling track record of shocking downgrades. I would concede that some of the products are very good.
What I am saying is that management have a very serious credibility issue when it comes to forecasting. Further, I believe they have very limited ability to translate the selling of very good products in enough volume at prices high enough to make this company a good earner.

What should be abundantly clear to all observers is this is a business based on agricultural products that is extremely weather dependent. Agricultural companies who are highly weather dependent for a sustainable supply of their product have traditionally almost always traded on very low PE multiples due to the cyclicality of their earnings resulting from weather cycles.
I think its clear the weather is getting more and more extreme so after two shocking seasons in a row there are no guarantees that the next one will be a good one or even representative on long term historical averages. Climate change is affecting the weather, regardless of whether people accept this or stick their head in the sand.
I repeat that the current year PE is 35. Good luck to investors buying in on that multiple.

Not saying that a Chinese or other company can't run this far more profitably with better management, in fact I think that's highly likely. Whether they remain keen after yet another savage profit downgrade is the open question.

Just need to look at Cash Flow Statements for the last few years

Cash burn OK for likes of XRO and Pushpay ....but for likes of Comvita ...hmmm

Negative FCF ..,and they even paid dividends

[Balance]

Just need to look at Cash Flow Statements for the last few years

Cash burn OK for likes of XRO and Pushpay ....but for likes of Comvita ...hmmm

Negative FCF ..,and they even paid dividends


As long as the banks are willing, why not - dividends paid using bank debts to 'optimize' capital structure.

Tegel does it and the Warehouse has been doing it for years! Oh - and they both deliver heaps of capital losses via declining share prices for their shareholders!

[Ogg]

Ogg.
CEO specifically mentioned in the behind the paywall NBR article yesterday it was an overseas company.
Management have an absolutely appalling track record of shocking downgrades. I would concede that some of the products are very good.
What I am saying is that management have a very serious credibility issue when it comes to forecasting. Further, I believe they have very limited ability to translate the selling of very good products in enough volume at prices high enough to make this company a good earner.

What should be abundantly clear to all observers is this is a business based on agricultural products that is extremely weather dependent. Agricultural companies who are highly weather dependent for a sustainable supply of their product have traditionally almost always traded on very low PE multiples due to the cyclicality of their earnings resulting from weather cycles.
I think its clear the weather is getting more and more extreme so after two shocking seasons in a row there are no guarantees that the next one will be a good one or even representative on long term historical averages. Climate change is affecting the weather, regardless of whether people accept this or stick their head in the sand.
I repeat that the current year PE is 35. Good luck to investors buying in on that multiple.

Not saying that a Chinese or other company can't run this far more profitably with better management, in fact I think that's highly likely. Whether they remain keen after yet another savage profit downgrade is the open question.

I wouldn't say it was extremely weather dependent, you get bad years and good years. You can stock up and hold inventory over bad years too. One advantage is that you always get a harvest unlike some industries that can get wiped out from a natural disaster. The sustainability is good too. Who knows, maybe the next 2 years will be a bumper season. The point is that it isn't as bad as you're making it out to be if you look at it over a 5-10 year period. Global warming will cause extremes at both ends so as long as it's managed it should be fine. Even so, the price per KG just shoots up if supply is low anyway, so they always make money.

Re take over, yeah it's more than likely going to be China Resources. They paid $10 per share in 2016. The price a couple of months ago when they were first were looking at the take over, the price was $9. The take over price isn't going to be sub $7, that's almost a given. It won't get shareholder approval, and if it falls through than next year the price could double if the harvest is good.

Looking at the PE of this company is the wrong way about it. Again, yes, if this was "Tegal" you should be doing this. Comvita basically operates a monopoly, that over the long term, continues to deliver returns for shareholders. The Chinese love food businesses in first world countries. Not only that, this company is special and has the best reputation in it's class. The PE just doesn't matter, that's like saying the Chinese are buying Auckland property for the rental yield.

[JoeGrogan]

[QUOTE=Ogg;711437] Looking at the PE of this company is the wrong way about it. Again, yes, if this was "Tegal" you should be doing this. Comvita basically operates a monopoly, that over the long term, continues to deliver returns for shareholders. The Chinese love food businesses in first world countries. Not only that, this company is special and has the best reputation in it's class. The PE just doesn't matter, that's like saying the Chinese are buying Auckland property for the rental yield.[/QUOTE}

LOL so valuing it on hype and speculation i guess is better than looking at earnings...

Can you explain a little more why you should do this with TGH but not CVT?

[Beagle]

Probably because some feel that nobody else makes good manuka honey and its totally unique and special lol...(better not tell all the other manuka honey producers lol)

[Ogg]

[QUOTE=Ogg;711437] Looking at the PE of this company is the wrong way about it. Again, yes, if this was "Tegal" you should be doing this. Comvita basically operates a monopoly, that over the long term, continues to deliver returns for shareholders. The Chinese love food businesses in first world countries. Not only that, this company is special and has the best reputation in it's class. The PE just doesn't matter, that's like saying the Chinese are buying Auckland property for the rental yield.[/QUOTE}

LOL so valuing it on hype and speculation i guess is better than looking at earnings...

Can you explain a little more why you should do this with TGH but not CVT?

Basically yeah. The product itself has massive hype and speculation over it's healing properties and health benefits. Hence why the share price should be valued the same.

Here's my call on Tegal back in 2016 when it was trading at twice today's price: https://www.sharetrader.co.nz/showthread.php?10411-Tegel-IPO&p=611620&viewfull=1#post611620

Tegal has to compete, Comvita is a monopoly.

[Ogg]

Probably because some feel that nobody else makes good manuka honey and its totally unique and special lol...(better not tell all the other manuka honey producers lol)

That's like saying A2 Milk has to worry about the independent farmer down the road who has a heard of A2 cows.

[Ghost Monkey]

Not sure I would say CVT has a monopoly. But they are the biggest player in a market with a limited supply of a premium product. Counts for something I suppose.

[Ogg]

Not sure I would say CVT has a monopoly. But they are the biggest player in a market with a limited supply of a premium product. Counts for something I suppose.

They're basically the "Fonterra" of honey, nobody else comes close. Instead of milk that can be produced globally, Manuka in effect can only be produced here. It's vertically integrated, controls the entire supply, distribution and sales. It not only dominates the entire category but it also has the best brand in the market. It's practically a monopoly as it could get.

[Beagle]

[QUOTE=JoeGrogan;711455]

Basically yeah. The product itself has massive hype and speculation over it's healing properties and health benefits. Hence why the share price should be valued the same.

Here's my call on Tegal back in 2016 when it was trading at twice today's price: https://www.sharetrader.co.nz/showthread.php?10411-Tegel-IPO&p=611620&viewfull=1#post611620

Tegal has to compete, Comvita is a monopoly.

Whatever you say mate....YAWN https://www.hukahoneyhive.com/shopping.html Just one of many, many other manuka honey producers out there selling their wares...suppose they're all worth 35 times their earnings too. Good luck.

[Ogg]

[QUOTE=Ogg;711459]

Whatever you say mate....YAWN https://www.hukahoneyhive.com/shopping.html Just one of many, many other manuka honey producers out there selling their wares...suppose they're all worth 35 times their earnings too.

lol, that's like giving me a link for Yahoo search vs Google.

Look at the "about us page", ma and pa operation: https://www.hukahoneyhive.com/about-us.html

On second thought, Comvita would actually appreciate that, no need for anti-trust regulation....

[Beagle]

http://www.purenewzealandhoney.com/ I could keep posting links all day if I had the time or thought it would do any good but I will leave it at that as you are perfectly entitled to your point of view and good luck with that.

[JoeGrogan]

[QUOTE=JoeGrogan;711455]

Basically yeah. The product itself has massive hype and speculation over it's healing properties and health benefits. Hence why the share price should be valued the same.

Here's my call on Tegal back in 2016 when it was trading at twice today's price: https://www.sharetrader.co.nz/showthread.php?10411-Tegel-IPO&p=611620&viewfull=1#post611620

Tegal has to compete, Comvita is a monopoly.

What's your call on TGH got to do with anything being discussed here? The SP of CVT has pretty much done as bad as TGH over the last 2 years.

Fair enough if you want to apply that valuation criteria to your investment, I just thought it was ignorant to tell people that earnings are irrelevant for this company.

[steveb]

Well considering they have a virtual monopoly they have certainly screwed up!

[winner69]

So valuable they had to hock off some of the family silver last year to shore up the business

[winner69]

With all this talk of premiumness, moats, monopoly, optionality, billions of Chinese consumers, etc etc you would think the compoany would be spewing out cash from operations

Far from it as chart below shows - CVT a real cash burner (2018 is onlyH1). Last 5 1/2 years negative cash flows of $36m

Add to that another $57m of plant and intangibes and they have burned through heaps eh

Company value or intrinsic value is the NPV of future cash flows ..... whats going to change .....hmmm

Book value $186m and market cap over $300m ....hmm again

Hope you only in for the big takeover ogg

[Ogg]

With all this talk of premiumness, moats, monopoly, optionality, billions of Chinese consumers, etc etc you would think the compoany would be spewing out cash from operations

Far from it as chart below shows - CVT a real cash burner (2018 is onlyH1). Last 5 1/2 years negative cash flows of $36m

Add to that another $57m of plant and intangibes and they have burned through heaps eh

Company value or intrinsic value is the NPV of future cash flows ..... whats going to change .....hmmm

Book value $186m and market cap over $300m ....hmm again

Hope you only in for the big takeover ggcc

Don't care, buying more today.

[BlackPeter]

Don't care, buying more today.

Backing up the truck, so to speak?

Good luck & all the best. Just remember to only buy what you can afford to lose (as with any other investment).

[Beagle]

With all this talk of premiumness, moats, monopoly, optionality, billions of Chinese consumers, etc etc you would think the compoany would be spewing out cash from operations

Far from it as chart below shows - CVT a real cash burner (2018 is onlyH1). Last 5 1/2 years negative cash flows of $36m

Add to that another $57m of plant and intangibes and they have burned through heaps eh

Company value or intrinsic value is the NPV of future cash flows ..... whats going to change .....hmmm

Book value $186m and market cap over $300m ....hmm again

Hope you only in for the big takeover ggcc

Its a shocker in more ways than one isn't it ! I reckon a pig dog with mange and fleas is more attractive lol
Really...the CEO has to go, he clearly has no idea...

[Ogg]

Its a shocker in more ways than one isn't it ! I reckon a pig dog with mange and fleas is more attractive lol
Really...the CEO has to go, he clearly has no idea...

I'm most worried about the OIO blocking the take over, but if it's just a dog with fleas then they won't care, right?

Only weak hands are selling now and those who look at PE all day.

[Balance]

I'm most worried about the OIO blocking the take over, but if it's just a dog with fleas then they won't care, right?

Only weak hands are selling now and those who look at PE all day.

Always good to see courage of conviction in action - the market needs people like you. Seriously and genuinely.

Not sure about weak hands selling though - could prove to be smart heads?

Time will tell.

[Ogg]

Always good to see courage of conviction in action - the market needs people like you. Seriously and genuinely.

Not sure about weak hands selling though - could prove to be smart heads?

Time will tell.

If they were smart they would have read the long term weather report back in January and sold at $9 a few months ago....

https://www.niwa.co.nz/climate/seasonal-climate-outlook/seasonal-climate-outlook-january-march-2018


New Zealand’s regional climate over the next three month period is anticipated to be dominated by the very warm ocean waters present around the country and in the Tasman sea, which will influence surface air temperatures and the likelihood of significant rainfall events.

Can't believe the buy depth is shrinking. This will be another great asset that the Chinese will buy at a bargain price. 5 years from now Kiwi's will be moaning about it.

Wouldn't be surprised if the Chinese played games and pulled the take over, then the stock will plummet, then they come back at a lower price.

I'm averaging down with no stop loss.

[stoploss]

If they were smart they would have read the long term weather report back in January and sold at $9 a few months ago....

https://www.niwa.co.nz/climate/seasonal-climate-outlook/seasonal-climate-outlook-january-march-2018



Can't believe the buy depth is shrinking. This will be another great asset that the Chinese will buy at a bargain price. 5 years from now Kiwi's will be moaning about it.

Wouldn't be surprised if the Chinese played games and pulled the take over, then the stock will plummet, then they come back at a lower price.

I'm averaging down with no stop loss.

They might get Comvita , but they won't get every Manuka tree in NZ and every beehive for that matter ( although they are welcome to my local one !!) So easy for another company to setup and replicate this ....

[Balance]

They might get Comvita , but they won't get every Manuka tree in NZ and every beehive for that matter ( although they are welcome to my local one !!) So easy for another company to setup and replicate this ....

At this level, I think upside is probably $1 max but downside is $2.50 - not the right equation to play the t/o scenario just yet imo.

[Ogg]

They might get Comvita , but they won't get every Manuka tree in NZ and every beehive for that matter ( although they are welcome to my local one !!) So easy for another company to setup and replicate this ....

If it was so easy why hasn't someone else replicated this by now and had the same success? That's like saying you're gonna start a shoe company and replicate Nike. You can't replicate the market leading brand. Ship has long sailed on anyone else copying this.

Comvita dominates the market and branding is especially important for the export market. Ma and Pa small businesses can sell locally at the farmers market but they can't export overseas to the big market. That's where the money is.


At this level, I think upside is probably $1 max but downside is $2.50 - not the right equation to play the t/o scenario just yet imo.

I think it's the other way around, $2.50 upside vs $1 downside. The Chinese buyer was happy paying $10, then they topped up at $7.20 last year. Stock has already been hammered recently too. The selling is likely coming from those technical investors who are looking at the dividend payment, just lol.

[Beagle]

I'm most worried about the OIO blocking the take over, but if it's just a dog with fleas then they won't care, right?

Only weak hands are selling now and those who look at PE all day.

Nobody will care including the OIO.
If only it was an easy as picking the right PE.
I start with the board, do they have a credible track record of governance ? (No otherwise they would have been reigning in the CEO's ludicrously optimistic forecasts that have regularly been wildly wrong
Does management have a credible track record with their performance and forecasting ability ? Repeated Epic Fails.
Have they been achieving previous KPI's as outlined in pervious years annual reports ? Repeated Epic fails
Is the company cash flow positive and is cash flow growing ? Epic Fail year after year.
Is the gearing acceptable ? Its getting a lot worse as they pay dividends out of negative cash flow.
What are the market dynamics and is the regulatory regime likely to change ? All the hype of sales into China hasn't come to much. The regulatory environment regarding manuka honey specification is uncertain and fluid.
Fundamentally is the forecast PE attractive given the sector the company trades in and its growth rate ? No its shockingly overpriced and could very easily halve in the foreseeable future.
Technically, is the stock in an confirmed uptrend ? No its in a confirmed downtrend despite takeover possibility which must be a massive red flag for anyone who believes anything about TA.

This company fails All the filters I use in stock selection...not just two or three, All of them !

Might as well back the truck up and learn yourself a serious lesson the hard way I reckon as you quite obviously don't want to listen to anyone on here.
I can see this under $4 if the party doing due diligence walks away.

[winner69]

Beagle ....share price was $13 odd once when profits were about the same as now

Betcha you glad your took your profits on Comvita and ran for the hills a while ago ....I was surprised you got sucked in with the hype at the time but at least you came out of it (lucky) making heaps. Going into the NZX50 helped eh and the Chinese starting buying also helped. Good on you

[winner69]

Looking back I note that the Chinese pumped $20m into Covita at $10.60 a share

Probably wondering how they can resurrect this investment

[Beagle]

Beagle ....share price was $13 odd once when profits were about the same as now

Betcha you glad your took your profits on Comvita and ran for the hills a while ago ....I was surprised you got sucked in with the hype at the time but at least you came out of it (lucky) making heaps. Going into the NZX50 helped eh and the Chinese starting buying also helped. Good on you

Yeap mate it was a good run while it lasted. Price went up 20% upon inclusion in the NZX50....and some say there are no free investment lunches :)

[Ogg]

Nobody will care including the OIO.
If only it was an easy as picking the right PE.
I start with the board, do they have a credible track record of governance ? (No otherwise they would have been reigning in the CEO's ludicrously optimistic forecasts that have regularly been wildly wrong
Does management have a credible track record with their performance and forecasting ability ? Repeated Epic Fails.
Have they been achieving previous KPI's as outlined in pervious years annual reports ? Repeated Epic fails
Is the company cash flow positive and is cash flow growing ? Epic Fail year after year.
Is the gearing acceptable ? Its getting a lot worse as they pay dividends out of negative cash flow.
What are the market dynamics and is the regulatory regime likely to change ? All the hype of sales into China hasn't come to much. The regulatory environment regarding manuka honey specification is uncertain and fluid.
Fundamentally is the forecast PE attractive given the sector the company trades in and its growth rate ? No its shockingly overpriced and could very easily halve in the foreseeable future.
Technically, is the stock in an confirmed uptrend ? No its in a confirmed downtrend despite takeover possibility which must be a massive red flag for anyone who believes anything about TA.

This company fails All the filters I use in stock selection...not just two or three, All of them !

Might as well back the truck up and learn yourself a serious lesson the hard way I reckon as you quite obviously don't want to listen to anyone on here.
I can see this under $4 if the party doing due diligence walks away.

Stop bashing the board. They can't control the weather or when the stock price goes too high because of market hype. On the whole this company has been a success over the long term, which is rare for the NZX.

I don't disagree with your technical assessment but that all just goes out the door when you're dealing with a company that has a monopolistic competitive edge. This is a rare case.

The Chinese ecommerce consumer market has only just started. Over the next decade the potential sales for Comvita are huge! If you think this is overvalued just look at A2 Milk! I wouldn't be surprised to see a JV deal with them too.

You're about to get a lesson on just how special and unique NZ is and what it has to offer for 1.4B+ consumers.

Paying $300m for this is like pennies to them. At worst I might break even. I see this as an easy quick trade. Happy to take shares from those who want to value it like it's an airline company.

[winner69]

Yeap mate it was a good run while it lasted. Price went up 20% upon inclusion in the NZX50....and some say there are no free investment lunches :)

I’m glad you listened to me (eventually) that the signs were there that things weren’t as rosy as they were making out......you were in love with them eh.

Glad you made heaps though.

[Beagle]

I’m glad you listened to me (eventually) that the signs were there that things weren’t as rosy as they were making out......you were in love with them eh.

Glad you made heaps though.

Thanks mate. I confess I do think some of the products they sell are very good b ut it takes good management to translate that into a company with strongly growing earnings and I think with the benifet of hindsight Scott Coulter has played very fast and loose with the growth word. I really appreciate your notes of caution on this one and other sage advice you so often freely share.

Fill ya boots Ogg and we'll see in due course who gets the lesson.

[Ogg]

Thanks mate. I confess I do think some of the products they sell are very good b ut it takes good management to translate that into a company with strongly growing earnings and I think with the benifet of hindsight Scott Coulter has played very fast and loose with the growth word. I really appreciate your notes of caution on this one and other sage advice you so often freely share.

Fill ya boots Ogg and we'll see in due course who gets the lesson.

What do you think the take over price is gonna be then Beagle?

If they have been looking at buying this for a "few months", then they must love it now at $6.60? Do you reckon they're gonna offer like $3 tops or something or pull out and let A2 Milk get it ;) ??

[Ghost Monkey]

I've heard of mud wrestling, how about you two get in a honey pit and have at it! Question is, who do I bet on?

[Ghost Monkey]

Nope, honey pit just sounds wrong. Forget I stuck my nose in.

[Beagle]

What do you think the take over price is gonna be then Beagle?

If they have been looking at buying this for a "few months", then they must love it now at $6.60? Do you reckon they're gonna offer like $3 tops or something or pull out and let A2 Milk get it ;) ??

I would think after this latest profit downgrade fiasco they're odds on favorite to pull out but why not put up a big buy order at $6.50 and see what happens. You might make heaps. Hint..if the market liked it so much why is there such a paucity of depth on the buy side and why is it dropping ?
Fill ya boots mate, someone else will be very relieved to see meaningful depth on the buy side at $6.50, I can almost guarantee that !

I am bored but now I really do give up, there is none so blind as those that simply will not see...

[winner69]

Nope, honey pit just sounds wrong. Forget I stuck my nose in.w


Buy some shares while you are here

[Ghost Monkey]

Buy some shares while you are here

(sigh) I was thinking of taking a break from buying on wishes and hope......

[Ogg]

I would think after this latest profit downgrade fiasco they're odds on favorite to pull out but why not put up a big buy order at $6.50 and see what happens. You might make heaps. Hint..if the market liked it so much why is there such a paucity of depth on the buy side and why is it dropping ?
Fill ya boots mate, someone else will be very relieved to see meaningful depth on the buy side at $6.50, I can almost guarantee that !

I am bored but now I really do give up, there is none so blind as those that simply will not see...

They would have known about the downgrade weeks ago. Didn't stop them last season from buying again. They're not gonna pull out because of a little bit of rain, sure, they might play some games but it's a done deal pretty much.

Yeah, I dunno why the market isn't interested, does make me nervous. I already bought today, might buy again tomorrow. Got $100k to throw at this so not in any rush. I'll just let it keep going down.