Comvita - CVT

[stoploss]

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 wthy 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.
Ogg, before you get in up to your neck . Check out the Pumpkin Patch thread . There was someone called Belgaron ( s/p) bought all the way down think he called it pyramiding ......
They didn’t have a monopoly on kids clothes , check out ManukaHealth , Manuka Doctor, plenty of people in this space . What happens if they don’t get a crop for the next 2 years ? Btw I hear a lot of Maori land via the trusts are being utilized in this space , more competition for CVT ....
Good luck but it has been pointed out here numerous times don’t buy in a downtrend .. People who pick bottoms end up with .....

[Balance]

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 ;) ??

Probably thanking their lucky stars that they waited for the impact of the last 3 months to become clear!

Interesting that Comvita manuka honey is heavily discounted in the shops if supply is an issue.

500g UMF5+ RRP = $56 https://www.comvita.co.nz/category/manuka-honey/rangeNZ00001

Same item at Countdown $36.99 (33% off) https://shop.countdown.co.nz/shop/productdetails?stockcode=269855

Go back two years and the supermarkets could not get any supply and if they did, would be sold out in half a day.

And so on and so forth - https://www.healthpost.co.nz/superfoods-and-organic/superfoods/manuka-honey

[winner69]

Ogg, before you get in up to your neck . Check out the Pumpkin Patch thread . There was someone called Belgaron ( s/p) bought all the way down think he called it pyramiding ......
They didn’t have a monopoly on kids clothes , check out ManukaHealth , Manuka Doctor, plenty of people in this space . What happens if they don’t get a crop for the next 2 years ? Btw I hear a lot of Maori land via the trusts are being utilized in this space , more competition for CVT ....
Good luck but it has been pointed out here numerous times don’t buy in a downtrend .. People who pick bottoms end up with .....

That Belgie was a legend

I think his first pyramid was Feltex

Might of stuffed up on Feltex and pumpkin patch but he had many big winners

[couta1]

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. I like a man who goes against the grain with a balsy punt, hope you do well. PS- I buy in all trends, up, down or sideways.

[iceman]

Love this debate and great to see the contrarian views. I remember debating this with Beagle when he was buying in and I opted for SEK at the same time, which has had a lot smoother ride.
Ogg good on you for sticking to what you believe in and saying so.

Discl: Never held this one

[Balance]

Love this debate and great to see the contrarian views. I remember debating this with Beagle when he was buying in and I opted for SEK at the same time, which has had a lot smoother ride.
Ogg good on you for sticking to what you believe in and saying so.

Discl: Never held this one

Second that Iceman. Always good to have robust exchanges of views and in the process, the friction creates some gems!

[Ogg]

Ogg, before you get in up to your neck . Check out the Pumpkin Patch thread . There was someone called Belgaron ( s/p) bought all the way down think he called it pyramiding ......
They didn’t have a monopoly on kids clothes , check out ManukaHealth , Manuka Doctor, plenty of people in this space . What happens if they don’t get a crop for the next 2 years ? Btw I hear a lot of Maori land via the trusts are being utilized in this space , more competition for CVT ....
Good luck but it has been pointed out here numerous times don’t buy in a downtrend .. People who pick bottoms end up with .....


Probably thanking their lucky stars that they waited for the impact of the last 3 months to become clear!

Interesting that Comvita manuka honey is heavily discounted in the shops if supply is an issue.

500g UMF5+ RRP = $56 https://www.comvita.co.nz/category/manuka-honey/rangeNZ00001

Same item at Countdown $36.99 (33% off) https://shop.countdown.co.nz/shop/productdetails?stockcode=269855

Go back two years and the supermarkets could not get any supply and if they did, would be sold out in half a day.

And so on and so forth - https://www.healthpost.co.nz/superfoods-and-organic/superfoods/manuka-honey

I just don't buy this "there's heaps of competition in this space" argument. For starters, there's room for everybody in New Zealand to do well overseas in the long term given the amount of people worldwide that need food. Secondly, what you'll find across all markets, is that the top 1% of companies own 99% of the market. In other words, it's the market leader that benefits the most. Just think of every market, there's always 1 or 2 companies that completely dominate. Comvita will just continue to dominate this market forever. As the market grows so will Comvita. That's why the Chinese are buying it, cause they can't recreate it, therefore they should pay a huge premium. It's the same with "land" in Auckland, every auction room is fulled with Chinese throwing money around at low yields (or high PE's).

Pumpkin Patch had nothing going for it, it was just a brand, that was it. Same with Tegal, they're all just generic companies that don't have anything unique going for them. Just imagine if Pumpkin Patch had the exclusive rights to cotton/polyester or if chickens where indigenous to New Zealand, completely different ball game.

Also, found this quote in an article dating back to 2016:

http://www.sharechat.co.nz/article/91881bb5/comvita-shares-slump-11-as-honey-products-maker-tips-1h-loss.html


Coulter said the China Resources had said it has no intention of seeking a full takeover because it saw value in the company in being New Zealand-owned and operated.

Either the Chinese are a bunch of sneaky little **** or it's A2 Milk that's buying them. Either way, I know who ever ends up buying it will pay a huge premium.

If it does drop down to the $3/4 level I'll be pretty bummed, but it will be because of dummy local investors who just have no idea how valuable premium New Zealand agricultural brands are worth to the world.

[stoploss]

Ogg you don't buy the competition argument , I don't buy the " Comvita will just continue to dominate this market forever" If Comvita are dominating the market why aren't they making serious money ? Why is the S/p half what it was ?
Do you realise at one stage there was more "Manuka" honey for sale in the UK then gets produced in NZ each year ..... and I thought most of it got exported to China ... So it's being ripped off everywhere . I understand they have taken measures to stop the counterfeiters but like drug cheats they are normally one step ahead of the game .
There is nothing stopping the Chinese from doing a JV with one of the IWI to use their land and labour to produce Manuka honey for them .Comvita to quote you "is just another brand" nothing unique .... so much so that the average punter in the UK doesn't know he is buying fake product .....

[Ogg]

Ogg you don't buy the competition argument , I don't buy the " Comvita will just continue to dominate this market forever" If Comvita are dominating the market why aren't they making serious money ? Why is the S/p half what it was ?
Do you realise at one stage there was more "Manuka" honey for sale in the UK then gets produced in NZ each year ..... and I thought most of it got exported to China ... So it's being ripped off everywhere . I understand they have taken measures to stop the counterfeiters but like drug cheats they are normally one step ahead of the game .
There is nothing stopping the Chinese from doing a JV with one of the IWI to use their land and labour to produce Manuka honey for them .Comvita to quote you "is just another brand" nothing unique .... so much so that the average punter in the UK doesn't know he is buying fake product .....

They are dominating the market in terms of their brand and position, but yeah, they're not making serious money yet for two reasons:

1) Trouble getting their product direct to the Chinese consumer.
2) Trouble making enough high quality product.

In other words, the problems are coming from the supply side, not the demand side.

This is what happened...Basically, back in the day, they only exported to Australia, UK, and USA. Then all of a sudden demand from China "sky rocketed". HOWEVER, just like what Ebay, Google, and Amazon experienced, the Chinese market is difficult to deal with and understand. Doing business there is completely different. This so called "daigou" channel developed, where people would full suitcases up with stock and small businesses would import goods through the so called "grey channel". This is why the stock price went up to $12. Then all of a sudden, the Chinese regulators had enough, and imposed new regulations. That's why the stock price went down.

Some companies like A2 Milk have done better because they understand the "daigou" channel more, where as other companies like Bellemy's didn't, so that's why their stock got hammered. This is also why Comvita have done the JV with the Chinese company, to try and improve access to the market through their network. I don't really know what went wrong, or how to fix it, I just know that Comvita have had a hard time lately. It's some how a combination of contacts, ecommerce, partnerships, and networks, that is required to some how break the Chinese market. That's why this Chinese company probably wants to buy it, because it has the secret to opening up the Chinese market, because well, it's Chinese.

If you look at the history of A2 Milk it was very "rocky" for many years, it went into administration at one stage. It's only recently that it's sales and profit has increased substantially. I think they understand the Chinese market better. I believe Comvita can have the same success as A2 if it fixes the two problems above.

Re second problem. Making more quality product is largely weather dependent but also more investment, and R&D is needed etc. This problem will fix itself.

Re counterfeiting, that's always a problem and always has been. Nike has the same problem so does Microsoft. This is just a side issue.

Re a JV with some other company or IWI. I doubt that will happen. This goes back to understanding the Chinese market. The Chinese consumers want the brand Comvita. They're all about reputation over there. It's like a status thing. It's sort of like what Apple has in the US.

At the end of the day, I just know these Chinese will pay up to $15 per share for this. It's just a matter of not getting short changed and squeezing them for every cent.

[Valuegrowth]

52-week range
5.14 - 9.21


Thank you for some quality discussion. These stocks are having some support in one of the longest bull markets. When bear market set, definitely, some stocks will fall more than others and will adjust according to the market situation and according to the demand and supply. Fundamentally weak stocks could fall below 52 week high once bear set. It could happen in 2019/20.

Investors buy stock mainly for two reasons. They are growth or great value.

Is Convita ideal for both bull and bear market? Will it go below its 52 week low or will it bounce back if market becomes strong again?

If I am correct pumpin patch expanded stores in the American region at the wrong time. I found another company has opened stores in these region and they are not doing well. Tegel is having some short term issues. They have to be strong competitor. Success of a company cannot measure by following few quarter or few years. If we follow companies at least five years,we can get some idea about their story and outlook. Food stocks should do well in global markets in the coming decade but not all companies will perform in the same manner. Strong balance sheet firms will stand out from the rest.

I like stock for all seasons but I don’t like to overpay for any stock as I have made mistakes in markets.

[Beagle]

Comvita have 2 main problems going forward.......they rely heavily on the honesty of their bee keepers who, in many cases, have a huge conflict of interest.
That is they have their own beehives as well as managing Comvita ones............ Pretty hard to manage the flow of honey or keep track of individual hives especially with Comvita's current management of this situation being to rely on good faith.
The other big issue is the new MPI standards do not allow for plant specific manuka honey.
The new manuka honey standards rely on the 2 chemical bases found in the honey and have completely left out the plant genetics.
I can tell you the Bee keepers are not happy about this as they believe soon the 2 measured chemicals will be able to be made in a lab then added to any honey to comply with the new standards.Snapiti
From another forum. I understand my friend Snapiti has some industry experience and I think its well worth investors on here being appraised of his insights.


I think you are spot on beagle......a spoonful of sugar added.....lol.
I would say I am somewhat ahead of most investors when it comes to understanding the manuka honey industry from the ground up and I totally agree with you about CVT being a agri share investment.
Investors are paying the price for valuing the company as something it is not.
Anyone considering investing would be wise to do extra homework on this one
After much research I am now convinced that CVT investments into manuka honey is going to take a very long time to pay off and will always be subject to weather like most agri investments.
Anyone who does not think CVT have lots of competition is best to talk to a manuka honey bee keeper.........they will tell you that they have 10 different buyers for every drum(200 litres) of manuka honey they can produce.

Snappers latest post. I miss him on here...he knew what he was talking about on this front at least...

[bull....]

i think this stock will drop big time if no takeover happens reminds me of red or black

[winner69]

Watson and Sons in Wairarapa pretty big player in this market with the Maori money behind it

Bad year last year ...apparently this year OKish

L'Oreal love their manuka honey

[JoeGrogan]

i think this stock will drop big time if no takeover happens reminds me of red or black


Totally agree. The timing of announcing this potential takeover also seems suspicious to me.

[Sideshow Bob]

What are the guys at the Bowling Club saying Winner? Are they backing up the truck again?

[winner69]

What are the guys at the Bowling Club saying Winner? Are they backing up the truck again?

No - lost too much last time .......they sticking with their latest goldmine ATM (mind you the only winner they've had)

Wont mention that CVT are going to be taken over at a huge price

[Ghost Monkey]

Ogg, you seem to be making two cases for why you should own this stock: Chinese (or 'other') buyer paying a premium for the stock or monopoly company with huge growth potential as it taps into overseas markets. I guess either way you see a win, short or long term, but which one do you think is more likely?

[Ogg]

Ogg, you seem to be making two cases for why you should own this stock: Chinese (or 'other') buyer paying a premium for the stock or monopoly company with huge growth potential as it taps into overseas markets. I guess either way you see a win, short or long term, but which one do you think is more likely?

Both are true, and both will happen.

Here's a great article explaining what happened in the last take over attempt.

http://www.stuff.co.nz/business/opinion-analysis/5853265/Comvita-in-play-as-latest-takeover-target.

Here's a quote I've highlighted:


Kiwi investors are not great at seeing the longer term picture. What seems like a good price today will often be accepted.

Basically, the Chinese think we're dumb (which we are) as we don't know the true value of our assets as we're in this "bubble" in the bottom of South East Asia.

The offer last time was $2.50, but the stock a few years later hits $12. HELLO!...It has always been a take over target. They're just trying to rip us off. In the year 2021 sales of Comvita will hit $400m, in 2025 probably $1B. $15 per share would be fair. Some where around $9-$10 would most likely happen. Just lol if the offer is less than $7, might as well just trade it for some muskets and blankets!

[Balance]

Both are true, and both will happen.

Here's a great article explaining what happened in the last take over attempt.

http://www.stuff.co.nz/business/opinion-analysis/5853265/Comvita-in-play-as-latest-takeover-target.

Here's a quote I've highlighted:



Basically, the Chinese think we're dumb (which we are) as we don't know the true value of our assets as we're in this "bubble" in the bottom of South East Asia.

The offer last time was $2.50, but the stock a few years later hits $12. HELLO!...It has always been a take over target. They're just trying to rip us off. In the year 2021 sales of Comvita will hit $400m, in 2025 probably $1B. $15 per share would be fair. Some where around $9-$10 would most likely happen. Just lol if the offer is less than $7, might as well just trade it for some muskets and blankets!

Re the takeover, you are making several huge assumptions here :

1. It is a Chinese party. You may be interested to know that it is a well known fact in the honey industry that an American player has been approaching several of the manuka honey players with takeover proposals.

2. That if it is Chinese, the buyer is dumb and will pay an inflated price. Recent transactions show that they are not prepared to pay any price to get businesses over here after doing their due diligence - Manuka Health and Freshmax being good examples.

3. Historical share prices are irrelevant when considering the value of a business - circumstances and business environment change. Could be for the better or could be for the worse. Have a look at Trilogy and you will see what happened there.

4. The counterfeiting and adulteration of manuka honey (in NZ - forget overseas) have been a huge problem in the industry. You should read about why MPI and the industry are attempting to move to the one standard - which ironically is a negative for Comvita.

There is little doubt that Comvita was the standard bearer for manuka honey but that has changed out there. And it will change even more when the MPI standard really kicks in and there is one standard to level the playing field for manuka honey. In the case of Comvita, definitely for the worse in the last 2 years.

Just visit any of the many NZ health shops run by Asians selling health products to tourists and shipping overseas, and you will know what I mean. Most don't even bother to stock Comvita any more - and it's NOT because they cannot get Comvita products. It is because they can get so many other brands now with lower prices but better selling margins.

5. Comvita is a monopoly? Auckland Airport is a monopoly. NZX is a monopoly. They have no real competitors. Comvita have plenty of competitors.

[Ogg]

Re the takeover, you are making several huge assumptions here :

1. It is a Chinese party. You may be interested to know that it is a well known fact in the honey industry that an American player has been approaching several of the manuka honey players with takeover proposals.

So what are you saying, that this could be a one off, random, low ball, take over offer? Even if that was true it would just start a take over war. This just reinforces the fact that people want this. It's like property in NZ, money is just flowing in offshore from everywhere. Something fundamental has changed for this company over the last few years, and that is that the Chinese market has just gone "bonkers" and all of a sudden a huge market has opened up. Also, the world is flooded with money, so anything that can not be reproduced, is going up in value.

Furthermore, I noticed that Chinese Resources upped their stake to over 10% last September. Either A., it's because they're making a take over offer, or B., they're blocking somebody else. It has to be them, or something else is brewing.


2. That if it is Chinese, the buyer is dumb and will pay an inflated price. Recent transactions show that they are not prepared to pay any price to get businesses over here after doing their due diligence - Manuka Health and Freshmax being good examples.

Name dropping brands that nobody even knows about. "Hey, do you want some Nakie shoes? Arrr, no thanks". They use the MGO standard to try and con customers. Just look at bitcoin, it's worth more than all the others combined. There's only one market leader. The Comvita brand resonates with Chinese consumers. That's why A2 is worth heaps and all the other players are not doing well.

What I'm saying is that Comvita deserves a huge premium because of it's market position.


3. Historical share prices are irrelevant when considering the value of a business - circumstances and business environment change. Could be for the better or could be for the worse. Have a look at Trilogy and you will see what happened there.

Trilogy is like a leasehold apartment in Auckland CBD.


4. The counterfeiting and adulteration of manuka honey (in NZ - forget overseas) have been a huge problem in the industry. You should read about why MPI and the industry are attempting to move to the one standard - which ironically is a negative for Comvita.

There is little doubt that Comvita was the standard bearer for manuka honey but that has changed out there. And it will change even more when the MPI standard really kicks in and there is one standard to level the playing field for manuka honey. In the case of Comvita, definitely for the worse in the last 2 years.

Just visit any of the many NZ health shops run by Asians selling health products to tourists and shipping overseas, and you will know what I mean. Most don't even bother to stock Comvita any more - and it's NOT because they cannot get Comvita products. It is because they can get so many other brands now with lower prices but better selling margins.

The counterfeiting issue is a good problem to have, because everybody wants what you are making. There are alot of "issues" happening recently, but that's only because it's sort of like the Wild West at the moment. The industry will move forward from this. Microsoft and Nike have problems. The high end consumers will always go out of their way to get the real thing.


5. Comvita is a monopoly? Auckland Airport is a monopoly. NZX is a monopoly. They have no real competitors. Comvita have plenty of competitors.

I could just turn it around and say Auckland Airport competes with Whenuapai airport. Or like Google search competes with Yahoo.

Comvita have competitors but they're like ants. They're only there to give the impression that there's competition.

I think with monopolies you look at things like barriers of entry and market dominance. In this case it's clear that Comvita have a monopoly, hence that's why it should be reflected in it's share price.

[Balance]

Comvita have competitors but they're like ants. They're only there to give the impression that there's competition.



Manuka Health has a turnover of $105m vs Comvita of $156m.

Sorry, Ogg - you do not actually know the industry.

[Ogg]

Manuka Health has a turnover of $105m vs Comvita of $156m.

Sorry, Ogg - you do not actually know the industry.

Coke:
Rev: $35.41 billion USD
Mkt Cap $188.97B


VS


Pepsi
Rev: $63.53 billion USD
Mkt cap $153.32B




A2 Milk
Rev:$214.4m (2016)
Mkt cap $8.6b (2018)


VS


Bellamy's
Rev:$244.6 million AUD (2016)
Mkt cap $2.2b (2018)


Also:

http://www.manukahealth.co.nz/en-nz/our-story/about-us/

Manuka Health was founded in 2006, just lol.

Are their numbers even legit? Comvita still 50% ahead.

I'm no expert on the industry but put two of these products on the Chinese shelves and I bet you Comvita will out sell them 10 to 1.

Whangarei airport still gets 18,770 aircraft movements per year (source wiki, dunno if legit), it's no Auckland Airport though.

[winner69]

On another site I was reading that the new MPI standards do not allow for plant specific manuka honey and that the new standards rely on two chemical compounds found in the honey and then when the two compounds are able to be made in the lab they can be added to any honey and called Manuka honey ....or something like that

A bit spooky that

[winner69]

L’Oreal Group brand Kiehl's has manuka honey in its flagship skincare product ......and it’s not Comvita because they wanted real Manuka honey ...(“....we wanted the indigenous, original product.")

https://www.stuff.co.nz/life-style/beauty/88283797/Why-Kiehls-turned-to-NZ-manuka-honey-for-skincare

[Ogg]

On another site I was reading that the new MPI standards do not allow for plant specific manuka honey and that the new standards rely on two chemical compounds found in the honey and then when the two compounds are able to be made in the lab they can be added to any honey and called Manuka honey ....or something like that

A bit spooky that

What's that, Frankenstein-honey.

"What's for breakfast mum?... Toast with honey made in the lab my son"

I'm sure they could isolate it or synthesize it some how. Would people actually buy it?

There are countless other examples, like Fiji Water or Toblerone Chocolate. You could recycle water from the sewer but would you pay $3 a bottle for it?

[Ogg]

L’Oreal Group brand Kiehl's has manuka honey in its flagship skincare product ......and it’s not Comvita because they wanted real Manuka honey ...(“....we wanted the indigenous, original product.")

https://www.stuff.co.nz/life-style/beauty/88283797/Why-Kiehls-turned-to-NZ-manuka-honey-for-skincare

L’Oreal is a top brand, that's why they probably said bugger it, we'll just get 'Joe blogs' honey. I don't think Toblerone Chocolate would be using Fiji Water in their factory.

[Beagle]

Snapiti e.mailed me today and he thinks that CVT produces approx. 15% of N.Z.'s manuka honey.
That's a very strange sort of monopoly :lol:

[Balance]

Snapiti e.mailed me today and he thinks that CVT produces approx. 15% of N.Z.'s manuka honey.
That's a very strange sort of monopoly :lol:

Strange indeed! All the other players are apparently 'ants' so that can only mean that Comvita is just a bigger ant?

[winner69]

Still have about $100m in Inventory as at December - thats more than $2 tied up in stock

That's enough stock to support a years sales

sort of suggests that bees not being too busy this year shouldn't have been a real problem

Just doesn't make sense .....should be plenty of stock

Maybe those doing the due diligence are having difficulty finding this stockpile of honey to see if it exists

[Balance]

Still have about $100m in Inventory as at December - thats more than $2 tied up in stock

That's enough stock to support a years sales

sort of suggests that bees not being too busy this year shouldn't have been a real problem

Just doesn't make sense .....should be plenty of stock

Maybe those doing the due diligence are having difficulty finding this stockpile of honey to see if it exists

Ties in with the heavy discounting of Comvita products now taking place - Comvita must be trying to get rid of old or low quality stock.

[Beagle]

Still have about $100m in Inventory as at December - thats more than $2 tied up in stock

That's enough stock to support a years sales

sort of suggests that bees not being too busy this year shouldn't have been a real problem

Just doesn't make sense .....should be plenty of stock

Maybe those doing the due diligence are having difficulty finding this stockpile of honey to see if it exists

Thanks again for your warning quite some time back that inventory with this company only goes in one direction and that's upwards !
I wonder if the company will continue to roll out the old cliché that having this much inventory is fine because the UMF rating goes up over time ?
I suspect there must be some serious issues with some of that inventory, could be why it's taking the interested party so long to complete their due diligence ?...wonder if Comvita have ever heard of the accounting convention when valuing stock, the lower of cost or net realisable value ? Seeing as they're allegedly a monopoly lol, maybe they think generally accepted accounting principle's don't apply to them ? Remind me again mate, what's HLG's stock turn, isn't it more than 4 times a year ?

[Ogg]

Snapiti e.mailed me today and he thinks that CVT produces approx. 15% of N.Z.'s manuka honey.
That's a very strange sort of monopoly :lol:

It's probably more like 25%, and it's the better quality stuff too.

A2 Milk has a 9% share in Australia and a 4% share of infant formula in China. McDonald's market share of the USA burger market is 17%

Obviously margin, distribution, and economies of scale come into play.

What's the point here, like there's many other Comvita's out there or something? Where are they then, why aren't they on the NZX too? I bet if you opened the books on them they would all be terrible.


Strange indeed! All the other players are apparently 'ants' so that can only mean that Comvita is just a bigger ant?

The ant is the New Zealand investment community. Take any company here and list it on the ASX, what happens, it goes up 10x in value overnight. Take it over to China, with the right strategy, vision, and execution, and it will be 100x in value. Go figure.


Still have about $100m in Inventory as at December - thats more than $2 tied up in stock

That's enough stock to support a years sales

sort of suggests that bees not being too busy this year shouldn't have been a real problem

Just doesn't make sense .....should be plenty of stock

Maybe those doing the due diligence are having difficulty finding this stockpile of honey to see if it exists

Bellamy's had stock issues too. Share price has recovered since. $100m of stock isn't even that much when you've got 1.4B mouths to feed.

These stock issues are just teething problems. The Chinese have only just started using Ecommerce. People were filling suitcases up and selling it on back streets. Seriously, the distribution network is fragile and problems like this happen.

That's why China Resources is buying it as they've got 4000 supermarkets in China and they know how to move the stock. The JV was just a sneaky way for them to get their foot in the door. I bet you they will clear that $100m in 3 months.


Ties in with the heavy discounting of Comvita products now taking place - Comvita must be trying to get rid of old or low quality stock.

Probably because NZ has no money. What are these discounts, like $60 down to $40 or something?


Thanks again for your warning quite some time back that inventory with this company only goes in one direction and that's upwards !
I wonder if the company will continue to roll out the old cliché that having this much inventory is fine because the UMF rating goes up over time ?
I suspect there must be some serious issues with some of that inventory, could be why it's taking the interested party so long to complete their due diligence ?...wonder if Comvita have ever heard of the accounting convention when valuing stock, the lower of cost or net realisable value ? Seeing as they're allegedly a monopoly lol, maybe they think generally accepted accounting principle's don't apply to them ? Remind me again mate, what's HLG's stock turn, isn't it more than 4 times a year ?

HLG is crap. That deserves a PE of 10 max. The exciting stocks on the NZX are the ones exporting food to Asia.

Quote from an article just released a few hours ago:

http://www.scoop.co.nz/stories/BU1804/S00517/market-close-nz-shares-rise-led-by-synlait-a2-comvita.htm


"We think New Zealand agribusinesses are in a good space, they make good products, and sell them to Asia," chief executive Andy Borland told BusinessDesk. "We have over the years developed our skills around exporting and dealing with Asia, particularly China, and we are looking at businesses within New Zealand that would work with those sort of dynamics and be complementary to our apple business. We are really looking for those sort of New Zealand opportunities.... Comvita, another beneficiary of Chinese demand for New Zealand products, rose 2.3 percent to $6.75."

I didn't buy today, cause I thought it would go sub $6.50 with all the negativity here. Someone was loading up the truck though.

[Leftfield]

Hi Ogg, even without my trusty stethoscope, I seem to detect a slight case of 'investor bias' in your recent posts.

The cure is quite simple, and merely requires listening with an open mind.

I wish you a speedy recovery.

[kiwidollabill]

Thanks again for your warning quite some time back that inventory with this company only goes in one direction and that's upwards !
I wonder if the company will continue to roll out the old cliché that having this much inventory is fine because the UMF rating goes up over time ?
I suspect there must be some serious issues with some of that inventory, could be why it's taking the interested party so long to complete their due diligence ?...wonder if Comvita have ever heard of the accounting convention when valuing stock, the lower of cost or net realisable value ? Seeing as they're allegedly a monopoly lol, maybe they think generally accepted accounting principle's don't apply to them ? Remind me again mate, what's HLG's stock turn, isn't it more than 4 times a year ?

Now that everyone has clued up to MGO aging the effect of this is fully priced in to new supply. Likely alot of the old stock isnt able to get into China through formal channels as will fail the C4 sugar test. FYI, very little of 'the good' stuff >15+ is able to get through to China due to high levels of C4 sugar (particularly in the past two seasons of poor weather).

[Ogg]

Hi Ogg, even without my trusty stethoscope, I seem to detect a slight case of 'investor bias' in your recent posts.

The cure is quite simple, and merely requires listening with an open mind.

I wish you a speedy recovery.

You mean "New Zealand bias"...I'm here so we all don't get ripped off.

I get that alot of people here are probably bitter because they bought in alot higher and have made a loss. Or because of the disappointing few years that have derailed what was once one of the "stock market darlings" on here.

We can argue about monopolies, market share, or what a fair PE is all day but what gets me most excited about this company is what will happen 5, 10, 15 years from now. The NZX is just fulled with so many "divy" stocks that we forget that there's a bigger long term picture out there. Fundamentally, I'm in this for the macroeconomics of this play, I'm not worried about the weather in NZ short term or if there is other local competition.

Even the likes of Sea Dragon, with all it's balance sheet problems, is likely being eyed up overseas. The recent run up of A2 Milk is testament to the changing global market place and the value of world class brands and the value of NZ's reputation as a prime asset and safe investment enviroment.

I'd admit I'm on here to rally the troops and make a quick buck. I'm not saying this is worth mega bucks. I'm saying it's worth $10 per share minimum for a take over given the current situation.

[BlackPeter]

You mean "New Zealand bias"...I'm here so we all don't get ripped off.

I get that alot of people here are probably bitter because they bought in alot higher and have made a loss. Or because of the disappointing few years that have derailed what was once one of the "stock market darlings" on here.

We can argue about monopolies, market share, or what a fair PE is all day but what gets me most excited about this company is what will happen 5, 10, 15 years from now. The NZX is just fulled with so many "divy" stocks that we forget that there's a bigger long term picture out there. Fundamentally, I'm in this for the macroeconomics of this play, I'm not worried about the weather in NZ short term or if there is other local competition.

Even the likes of Sea Dragon, with all it's balance sheet problems, is likely being eyed up overseas. The recent run up of A2 Milk is testament to the changing global market place and the value of world class brands and the value of NZ's reputation as a prime asset and safe investment enviroment.

I'd admit I'm on here to rally the troops and make a quick buck. I'm not saying this is worth mega bucks. I'm saying it's worth $10 per share minimum for a take over given the current situation.

Ogg, appreciating your enthusiasm.

If at any stage you are running out of arguments - I am sure you will find many more reasons why this company will succeed on the PEB, the WYN, the RAK, the MPG (ouch), the CBL (ouch) or on the CRP thread; Even the crypto threads might provide a lesson or two ;); Just a hint - obviously every company / security is different. Look for the similarities, not for the differences to learn from.

Just curious ... are there any risks you could see which would turn your amazing vision about CVT's future to custard?

How likely are they to eventuate?

Not saying this ship will go down (though I have problems imagining its rocket like launch either), but before you buy a vessel it is always a good idea to first do some research what issues others might have had in the past. Always cheaper to learn from other peoples mistakes instead of repeating them ....

Discl: never did hold CVT (i.e. I missed an amazing uptrend) but not bitter about that. It just hurts sometimes to see people hurting themselves by tapping into the same old traps ... much more fun to make new mistakes :p

All the best to you!

[Ogg]

king
Just curious ... are there any risks you could see which would turn your amazing vision about CVT's future to custard?

How likely are they to eventuate?



Selling food is pretty simple. I mean, yeah, there's always risks but no more than any other company. What ever risks this has A2 also has. The weather comes and goes, the myrtle rust scare was over blown, government regulation is a positive long term, old stock can be moved, competitors can be bought out. This company has been around for decades. The upside potential dwarfs the risks.

The real risk to me is if the Chinese pull out and play games or do some Sun Tzu tactics at the last minute. All jokes aside though, why is everyone so scared here? This is a pretty safe trade. They won't pull out cause if they do the price will drop and then they will want back in. It's already on "special" and heavily discounted now.

In any case, I'm not taking the risks, the third party who is buying this company is.

[stoploss]

Selling food is pretty simple. I mean, yeah, there's always risks but no more than any other company. What ever risks this has A2 also has. The weather comes and goes, the myrtle rust scare was over blown, government regulation is a positive long term, old stock can be moved, competitors can be bought out. This company has been around for decades. The upside potential dwarfs the risks.

The real risk to me is if the Chinese pull out and play games or do some Sun Tzu tactics at the last minute. All jokes aside though, why is everyone so scared here? This is a pretty safe trade. They won't pull out cause if they do the price will drop and then they will want back in. It's already on "special" and heavily discounted now.

"In any case, I'm not taking the risks, the third party who is buying this company is."

The risk is you invest in the stock as you have stated ( $ 100K) and the third party realises- as you must have it is not a monopoly , plenty of competition , the harvest is unpredictable and they pull out ... meantime you are holding shares in a company that is not making heaps of money , potentially has another poor crop , China does not buy as much as they want to certify it better as so much is counterfeit etc , etc .....That's some risk you are taking

[Ogg]

"

The risk is you invest in the stock as you have stated ( $ 100K) and the third party realises- as you must have it is not a monopoly , plenty of competition , the harvest is unpredictable and they pull out ... meantime you are holding shares in a company that is not making heaps of money , potentially has another poor crop , China does not buy as much as they want to certify it better as so much is counterfeit etc , etc .....That's some risk you are taking

Why would they buy stock at $10, top up at $7.20, then pull out at $6.85 because it rained for a few weeks? Meanwhile A2 is at $10b.

Sistema was sold for NZD $660m, and had about $190m revenue. It was selling PLASTIC of all things! It was a great brand though.

Where are we at today's price, $300m, maybe $400m after debt? It's worth more than that. Somewhere around $10 per share or $500m is where it should be at.

Once the Chinese own it, the "door" will open in China because the regulators there will allow it.

[steveb]

The way I look at it is CVT have moved into a high risk option,yes there is an upside if the takeover goes through,and the downside is you have a company with poor management,no growth,and piss poor profits.The SP will reflect the downside if the takeover falls over.

What you should be asking is where can I find a possible 20-30% profit in say 3 months time with less risk.I can think of several with a lot less downside risk.

Disc I do not hold CVT and are not looking to invest at the mo

[Ogg]

The way I look at it is CVT have moved into a high risk option,yes there is an upside if the takeover goes through,and the downside is you have a company with poor management,no growth,and piss poor profits.The SP will reflect the downside if the takeover falls over.

What you should be asking is where can I find a possible 20-30% profit in say 3 months time with less risk.I can think of several with a lot less downside risk.

Disc I do not hold CVT and are not looking to invest at the mo

What are you talking about? There's loads of growth, still on track for $400m sales in 2021 I believe. Blaming management for the weather and the regulatory environment of the "grey channels" is unfair.

Show me a stock that will give a 30% return in 3 months while we are in this global risk off sentiment.

Wouldn't be surprised if it went into a halt next week once they realise the price isn't dropping. Based on these volumes there's strong support at mid $6. Probably mates topping up before it's a done deal.

[Ogg]

Article in the NZ Heard today

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12035419


a tub of New Zealand Manuka honey, which had a misprinted expiry date of February 29, 2019 - which does not exist, was sent back to New Zealand.

"When that product landed, [China Inspection and Quarantine] CIQ and the border said they couldn't release the product because the date didn't exist," New Zealand Trade and Enterprise (NZTE) commissioner in Shanghai, Damon Paling, said.


"I always had this idea that China was the wild west and products out of [specifications could come in] quite easily but no, it's quite the opposite," Andrews said.

Once the Chinese buy Comvita, these sort of problems will go away :p

[couta1]

Warrior of the week award goes to Ogg, who defended his position against all comers and withstood the battle, well done. PS-Hope you manage to win the war.

[Ogg]

Warrior of the week award goes to Ogg, who defended his position against all comers and withstood the battle, well done. PS-Hope you manage to win the war.

I'm only in about $70k, with average around $6.80. Not really that much ahead. At least there's decent support around this level. Volume might begin to dry up as the majority wait for the take over update. I need at least $8 to justify this risk. Hopefully this will all wrap up fast so I can cash out and move on.

[Beagle]

Warrior of the week award goes to Ogg, who defended his position against all comers and withstood the battle, well done. PS-Hope you manage to win the war.

He certainly gets the quote of the week claiming CVT has a monopoly :lol: Thanks for the entertainment.

[Balance]

He certainly gets the quote of the week claiming CVT has a monopoly :lol: Thanks for the entertainment.

Second that :D

My second favourite quote is that CVT is a giant and the competitors are all ants. Never seen such big ants in my life! :D

[Ogg]

He certainly gets the quote of the week claiming CVT has a monopoly :lol: Thanks for the entertainment.


Second that :D

My second favourite quote is that CVT is a giant and the competitors are all ants. Never seen such big ants in my life! :D

It's not too late for you guys to get in too. No broker fees when you cash out too :D

[Sideshow Bob]

Farmers Weekly chat with Neil Craig

https://issuu.com/farmersweeklynz/docs/farmers_weekly_nz_april_23_2018/1?ff=true&e=30768707/60388817

"Big inventory to guard against poor harvest"

[Ogg]

Farmers Weekly chat with Neil Craig

https://issuu.com/farmersweeklynz/docs/farmers_weekly_nz_april_23_2018/1?ff=true&e=30768707/60388817

"Big inventory to guard against poor harvest"

Thanks for that. I love the sound of these quotes, page 14...:)




"We didn't want any shareholders selling out due to the downgrade and then seeing a month or so later that there's been an offer for the company"


"We wouldn't have allowed them to do [the due diligence] unless the value expectations were reasonable."




Quality of the harvest looks good too. Current stock will see them through this year.

Also, this is interesting:


"If a party ticks all the boxes we have to give them the maximum chance to make an offer"

What kind of boxes do you need to tick to make an offer I wonder?

Feeling more confident day by day.

[iceman]

I find it interesting that we have all these discussions on CVT thread while a little noticed and much better run company in the same (sort of) industry headquarters just down the road is steadily increasing all the right numbers. Go SEK

[Ogg]

I find it interesting that we have all these discussions on CVT thread while a little noticed and much better run company in the same (sort of) industry headquarters just down the road is steadily increasing all the right numbers. Go SEK

Seeka looks OK but the Chinese aren't gonna pay a premium for Chinese gooseberries when they can just grow it themselves.

It's kinda like the difference between gold and silver, where both have similar properties but one of them has that "X" factor which makes it worth so much more. This is why this stock is so much more exciting, because it's so hard to value this unique X factor. Some people think it's snake oil and a fad, where as others regard it as a miracle food and will pay hundreds of dollars per kg. What ever the case it's rare, and highly sort after.

Basically, the market is trying to work out the correct premium to add (if any). My opinion is that it should be significant given it's dominant market position, long trading history, it's vertical integration, and strong global brand awareness.

More importantly, it can't be recreated. The Chinese have a reputation of copying, imitating, ripping off, and circumnavigating other companies. In this situation they have no choice but to make a take over.

I'm sure you'll do well with Seeka. CVT is definitely more of a riskier stock, and not for value investors.

[kiora]

Ogg "More importantly, it can't be recreated. The Chinese have a reputation of copying, imitating, ripping off, and circumnavigating other companies. In this situation they have no choice but to make a take over." BUT NZ goosberries have a unique competitive advantage.Its all in the breeding,grower contracts(even in China) & branding. Chjnese may try to copy but can only pick off low hanging fruit

[iceman]

Seeka looks OK but the Chinese aren't gonna pay a premium for Chinese gooseberries when they can just grow it themselves.

It's kinda like the difference between gold and silver, where both have similar properties but one of them has that "X" factor which makes it worth so much more. This is why this stock is so much more exciting, because it's so hard to value this unique X factor. Some people think it's snake oil and a fad, where as others regard it as a miracle food and will pay hundreds of dollars per kg. What ever the case it's rare, and highly sort after.

Basically, the market is trying to work out the correct premium to add (if any). My opinion is that it should be significant given it's dominant market position, long trading history, it's vertical integration, and strong global brand awareness.

More importantly, it can't be recreated. The Chinese have a reputation of copying, imitating, ripping off, and circumnavigating other companies. In this situation they have no choice but to make a take over.

I'm sure you'll do well with Seeka. CVT is definitely more of a riskier stock, and not for value investors.

Agree with your last sentence. I know its the wrong thread but Kiwifruit exports to China have grown from $123m in 2014 to over $400m in 2017, so don't agree with your statement that the Chinese can "just grow it themselves" !!
Wish you well with CVT

[Ogg]

Ogg "More importantly, it can't be recreated. The Chinese have a reputation of copying, imitating, ripping off, and circumnavigating other companies. In this situation they have no choice but to make a take over." BUT NZ goosberries have a unique competitive advantage.Its all in the breeding,grower contracts(even in China) & branding. Chjnese may try to copy but can only pick off low hanging fruit


Agree with your last sentence. I know its the wrong thread but Kiwifruit exports to China have grown from $123m in 2014 to over $400m in 2017, so don't agree with your statement that the Chinese can "just grow it themselves" !!
Wish you well with CVT

They do grow it themselves, in fact they grow almost 5 times as much as New Zealand (Wikipedia). It's not even from NZ, it's a native plant from China, just lol. According to this article (http://bopbusinessnews.co.nz/2017/06/18/kiwifruit-exports-china-help-zespri-win-major-business-awards/) they have also had "problems" exporting to China too. Even the name Kiwifruit is just a marketing ploy, which they can't use over there so they have to use the brand name Zespri or something.

I would question the long term outlook. Is the recent ramp up in sales just high end Chinese consumers buying while the market is in it's infancy? Would you be able to compete with the local domestic market there long term? The Chinese will want to protect their industry. It may have been a nice few years but sooner or later the door will close or exports will taper off with increased regulation.

Look, we're all in the same boat here. Nobody is doubting New Zealand's agriculture industry and it's prime position on the door step to Asia. Everyone is doing well. However, there's a major difference between something that can easily be grown in 'the back of the rice paddy fields' and something that is unquestionable unique. I don't just mean unique, I mean exclusive. For example, you can say that USA has oranges or Ecuador has bananas etc but oranges and bananas grow all over the world so it's not exclusive.

It's more than just slapping a "branding sticker" on it and saying it's from "clean, green, NZ". That's what Seeka is likely doing and having some limited success. It's still very much similar to what Tegal would do, "slapping a branding sticker" on a chicken and claiming it's gonna export it all over Asia, "yeah right" (Tui billboard).

Will find out sooner or later just how much the Chinese will pay for Comvita. Anything less than $10 per share is likely going to be rejected by the board as they are well aware of the situation and judging by the last take over attempt they understand the true underlying value offered here.

[kiwidollabill]

If you saw the Kiwifruit orchards in China you might not want to eat it. Some of the growers wont even eat their own fruit.....

[Ogg]

If you saw the Kiwifruit orchards in China you might not want to eat it. Some of the growers wont even eat their own fruit.....

So why is Zespri planning on growing Kiwifruit in China then? I think if you read this article it provides a good overview of what we've been discussing (don't forgot to read the comments at the bottom). It's a pretty interesting read and relates to both Comivta, Seeka, and also A2 Milk:

https://www.stuff.co.nz/business/industries/81961442/Inside-Zespris-plans-to-grow-Kiwi-kiwifruit-in-China

The key take away to understand (and this is more of a personal view and a bit of a conspiracy theory) is that ultimately it's about "China first". From China's prospective their end goal is to have everything produced in China. In other words, they're not going to continue to buy over priced kiwifruit and infant milk forever. Their end goal is to effectively steal the (food) technology and then repatriate it back to China.

Alot of these JV and partnerships are just a way for China to expedite this process. Yes, for a few years we get high prices for kiwifruit and milk but once their domestic market ramps up production and improves food safety that's when they'll switch back to local producers. What I'm saying is that eventually China will be able to produce good quality kiwifruit and milk and that's when they'll roll out protectionism rules and effectively shut out the global market. Say good bye to A2 and Seeka shares when this happens.

And, that's what brings me back to Comvita, because if they try and do the above the can't, because it's EXCLUSIVELY only available here, and Comvita EFFECTIVELY has a global monopoly. That's why I'm expecting a huge take over premium.

[hardt]

So why is Zespri planning on growing Kiwifruit in China then? I think if you read this article it provides a good overview of what we've been discussing (don't forgot to read the comments at the bottom). It's a pretty interesting read and relates to both Comivta, Seeka, and also A2 Milk:

https://www.stuff.co.nz/business/industries/81961442/Inside-Zespris-plans-to-grow-Kiwi-kiwifruit-in-China

The key take away to understand (and this is more of a personal view and a bit of a conspiracy theory) is that ultimately it's about "China first". From China's prospective their end goal is to have everything produced in China. In other words, they're not going to continue to buy over priced kiwifruit and infant milk forever. Their end goal is to effectively steal the (food) technology and then repatriate it back to China.

Alot of these JV and partnerships are just a way for China to expedite this process. Yes, for a few years we get high prices for kiwifruit and milk but once their domestic market ramps up production and improves food safety that's when they'll switch back to local producers. What I'm saying is that eventually China will be able to produce good quality kiwifruit and milk and that's when they'll roll out protectionism rules and effectively shut out the global market. Say good bye to A2 and Seeka shares when this happens.

And, that's what brings me back to Comvita, because if they try and do the above the can't, because it's EXCLUSIVELY only available here, and Comvita EFFECTIVELY has a global monopoly. That's why I'm expecting a huge take over premium.

Over the past decade or two Chinas food safety standards and production have been improving "bigly"... yet their imports of premium overseas product has been rising rapidly
The people who buy domestic products in China are the lower-middle classes., the premium imported products are there for the middle-upper classes.
The culture is heavily centred around status, New Zealand is a brand to their consumers, a premium brand afforded by few.
Remember Comvitas ( +A2M ) products are not being bought by your average Joe factory worker in China... The higher end consumer doesn't care what or how much of something is produced domestically in China end of story...

https://cdn.auckland.ac.nz/assets/foodandhealth/News/Dr%20Andrew%20Zhu.pdf

[Ogg]

Over the past decade or two Chinas food safety standards and production have been improving "bigly"... yet their imports of premium overseas product has been rising rapidly
The people who buy domestic products in China are the lower-middle classes., the premium imported products are there for the middle-upper classes.
The culture is heavily centred around status, New Zealand is a brand to their consumers, a premium brand afforded by few.
Remember Comvitas ( +A2M ) products are not being bought by your average Joe factory worker in China... The higher end consumer doesn't care what or how much of something is produced domestically in China end of story...

https://cdn.auckland.ac.nz/assets/foodandhealth/News/Dr%20Andrew%20Zhu.pdf

Thanks for that link. Yeah, I agree with all that. However, it's pretty common knowledge though. The hard thing is predicting what the Chinese market will be like in 10-15 years from now.

At the moment, all of the New Zealand food exporters are doing well, especially the leading brands. As the Chinese middle class grows it will make up a higher percentage of the market. That will likely create further demand for "local brands" and over time their reputation will grow to equal that of other international brands. Eventually the prestige of having something imported will fade and in opinion, only the top 1% of international brands will survive in China.

Also, as China is a one party state, this change could happen quickly as regulation could easily be brought into place to help protected the consumer and their local economy. Unlike the Western world, there is no level playing field or 100% free trade there.

I think this is what "China Resources" will be considering with their take over offer of Comvita, and why they see it as a good long term play. I believe that A2 Milk will eventually collapse or pull out of China (not anytime soon), as the Chinese will come up with their own local version and copy them. However, Comvita has to be taken over as they can not copy them.

[Balance]

Farmers Weekly chat with Neil Craig

https://issuu.com/farmersweeklynz/docs/farmers_weekly_nz_april_23_2018/1?ff=true&e=30768707/60388817

"Big inventory to guard against poor harvest"

So why would a bad harvest impact so very very badly on sales and profitability then?

Something smells badly and it's not the manuka honey or the ants!

[kiwidollabill]

So why is Zespri planning on growing Kiwifruit in China then? I think if you read this article it provides a good overview of what we've been discussing (don't forgot to read the comments at the bottom). It's a pretty interesting read and relates to both Comivta, Seeka, and also A2 Milk:

https://www.stuff.co.nz/business/industries/81961442/Inside-Zespris-plans-to-grow-Kiwi-kiwifruit-in-China

The key take away to understand (and this is more of a personal view and a bit of a conspiracy theory) is that ultimately it's about "China first". From China's prospective their end goal is to have everything produced in China. In other words, they're not going to continue to buy over priced kiwifruit and infant milk forever. Their end goal is to effectively steal the (food) technology and then repatriate it back to China.

Alot of these JV and partnerships are just a way for China to expedite this process. Yes, for a few years we get high prices for kiwifruit and milk but once their domestic market ramps up production and improves food safety that's when they'll switch back to local producers. What I'm saying is that eventually China will be able to produce good quality kiwifruit and milk and that's when they'll roll out protectionism rules and effectively shut out the global market. Say good bye to A2 and Seeka shares when this happens.

And, that's what brings me back to Comvita, because if they try and do the above the can't, because it's EXCLUSIVELY only available here, and Comvita EFFECTIVELY has a global monopoly. That's why I'm expecting a huge take over premium.

This isnt the first time they tried....last attempt saw the gold PVR cultivar stolen and planted en mass. They're doing it now very cautiously.

You can get Australian Manuka honey.... their growth to China in the last 2 years has been strong, it scares the NZ industry to no end.

[BlackPeter]

...

I think this is what "China Resources" will be considering with their take over offer of Comvita, and why they see it as a good long term play. I believe that A2 Milk will eventually collapse or pull out of China (not anytime soon), as the Chinese will come up with their own local version and copy them. However, Comvita has to be taken over as they can not copy them.

Pull the other one ...

I guess no doubt the Chinese are concerned (as anybody else) about controlling and securing their food supply. Nothing wrong with that. Of course will they have at some stage A2 herds - as well as whatever fruit orchards they deem necessary to feed their people.

Will this result in A2 milk collapsing? Not sure why. I agree it is likely that the world milk supply is likely to move towards A2, but than - Fonterra is producing A1/A2 milk (as everybody else) and didn't collapse yet despite the chinese having the same herds ..., so why should A2 collapse if the world moves A2?

But back to Manuka - one needs a healthy dose of blinkers to think that Manuka honey is anything special ...

Two issues:

1) So far there is no evidence for Manuka honey being any different in its nutritional or health value than any other honey when eaten:

https://www.consumer.org.nz/articles/manuka-honey?gclid=Cj0KCQjw5fDWBRDaARIsAA5uWTgtX6YpmdnP7m nIfSj4aKtQmxv28Jycn0D9laag7Ng7T7FkgRlk3KoaAgm8EALw _wcB

Sure - this does not stop the Chinese buying it - I heard it is especially potent when mixed with powder from white rhino horn and dried tiger penis ... :p

but maybe they move on at some stage to the next fad ... and

2)

If at some stage somebody is able to prove any positive health effects (other than placebo) of Manuka honey - than, as indicated by others, it is easy to source Manuka honey from Australia. And - if the Chinese are really keen - what do you think will stop them from growing Manuka in China and making their own. You can grow Manuka easily in any temperate climate - it even grows in the UK!

Just needs sufficient (but not too much) water, poor soils, not too cold (though some frost is fine) and not too hot. Manuka is actually a native of Australia (and arrived only later at our shores coming form Australia): https://en.wikipedia.org/wiki/Leptospermum_scoparium. Lots of Manuka as well already oversees (other than NZ / Australia) - i.e. no way we could stop that.

Here goes your monopoly (well, it never existed) - no reason at all for the Chinese to pay too much for a badly governed and managed NZ company with supply and logistical issues ...

[Beagle]

Pull the other one ...

But back to Manuka - one needs a healthy dose of blinkers to think that Manuka honey is anything special ...

Two issues:

1) So far there is no evidence for Manuka honey being any different in its nutritional or health value than any other honey when eaten:



:lol: :lol: Its only Monday but I'm going to award the post of the week early this week, too funny I nearly split my sides laughing.
Checking back to what many people including myself believe to be the real source of the truth, the Bible, eating honey is very good for you but not too much, many verses in there saying that and NOT one single one mentioning manuka honey saying its even better which makes me deeply skeptical of this latest fad.

[Balance]

1) So far there is no evidence for Manuka honey being any different in its nutritional or health value than any other honey when eaten:

https://www.consumer.org.nz/articles/manuka-honey?gclid=Cj0KCQjw5fDWBRDaARIsAA5uWTgtX6YpmdnP7m nIfSj4aKtQmxv28Jycn0D9laag7Ng7T7FkgRlk3KoaAgm8EALw _wcB

Sure - this does not stop the Chinese buying it - I heard it is especially potent when mixed with powder from white rhino horn and dried tiger penis ... :p



A lot of Asian (not just Chinese) medicine and health products are based upon anecdotal evidence rather than scientific considerations.

Hence, the huge prices paid for swallows' spittle (birds nest), sea cucumber (bottom garbage eaters), rhino horns (animal keratin), fish swim bladders, ginseng roots, winter toads' liver etc etc.

Manuka honey is now included in that list.

Nobody is going to change their ways and mind in a hurry!

And for once, I actually agree with Ogg. Now I have to go and wash my mouth out!

[dobby41]

:lol: :lol: Its only Monday but I'm going to award the post of the week early this week, too funny I nearly split my sides laughing.
Checking back to what many people including myself believe to be the real source of the truth, the Bible, eating honey is very good for you but not too much, many verses in there saying that and NOT one single one mentioning manuka honey saying its even better which makes me deeply skeptical of this latest fad.
Can anyone else see parallels with A2 beta casein and health claims?

[Beagle]

Can anyone else see parallels with A2 beta casein and health claims?

A2 have undertaken a number of clinical studies that are very supportive.

[Balance]

A2 have undertaken a number of clinical studies that are very supportive.

Plus,the anecdotal evidence is totally compelling.

Good doctor friend of mine in Oz buys A2M infant formula for his son who was previously on soya based infant formula due to lactose intolerance. His consistent complaint is that his local supermarket (small Queensland town) cannot keep up with the demand.

[Ghost Monkey]

lol, 'supportive' and 'totally compelling'. Where's 'conclusive'? As conclusive as manuka honey on toast perhaps? As Ogg pointed out, people gonna believe want they want to believe, clever ones make a business out of that!

[Ogg]

lol, 'supportive' and 'totally compelling'. Where's 'conclusive'? As conclusive as manuka honey on toast perhaps? As Ogg pointed out, people gonna believe want they want to believe, clever ones make a business out of that!

And to think they're gonna mix the two together and sell them both at an even higher premium...lol.

Monopoly or no monopoly, snake oil or not, if A2 Milk is $10b then Comvita is at least $500m, that's all I'm saying...I'm in for the profit and with the money I've made I'm gonna go buy some A1 Milk and clover honey.

'To capitalism'.

[Balance]

And to think they're gonna mix the two together and sell them both at an even higher premium...lol.

Monopoly or no monopoly, snake oil or not, if A2 Milk is $10b then Comvita is at least $500m, that's all I'm saying...I'm in for the profit and with the money I've made I'm gonna go buy some A1 Milk and clover honey.

'To capitalism'.

One company makes over $100m in NPAT and consistently exceeds expectations.

The other struggles to make $10m and consistently fails to meet expectations.

One is a giant and the other is an ant!

[Balance]

lol, 'supportive' and 'totally compelling'. Where's 'conclusive'? As conclusive as manuka honey on toast perhaps? As Ogg pointed out, people gonna believe want they want to believe, clever ones make a business out of that!

I would take the word of a doctor who is a specialist in his field than the musings of any poster (positive or negative) on this site any time.

[Ogg]

One company makes over $100m in NPAT and consistently exceeds expectations.

The other struggles to make $10m and consistently fails to meet expectations.

One is a giant and the other is an ant!

On that calculation Comvita is worth $1b then?

You're not looking at the full picture. A2 went into administration at one point. Comvita have had really good years. Sure, A2 is outperforming in the last few years. My point is that they're both good/similar.

Would you be shorting A2 now? The real question is what's the long term valuation. Where will these companies be in the year 2030? I'm not asking for mega bucks for Comvita, just a decent premium given the situation and long term outlook.

I see it's at $7. Supply looks tight. Weak hands have probably sold out looking for sub 20 PE companies. Mostly the believers holding now.

[Balance]

On that calculation Comvita is worth $1b then?

You're not looking at the full picture. A2 went into administration at one point. Comvita have had really good years. Sure, A2 is outperforming in the last few years. My point is that they're both good/similar.

Would you be shorting A2 now? The real question is what's the long term valuation. Where will these companies be in the year 2030? I'm not asking for mega bucks for Comvita, just a decent premium given the situation and long term outlook.

I see it's at $7. Supply looks tight. Weak hands have probably sold out looking for sub 20 PE companies. Mostly the believers holding now.

One deserves to trade at a PE premium and the other at a PE discount - beauty is in the eye of the beholder?

Meanwhile, just bought a jar of 500g Comvita UMF5+ (RRP - $56) for $33.95 - 40% discount.

Wonder what that is telling us when CVT is crying poor over bad harvest.

[Ogg]

One deserves to trade at a PE premium and the other at a PE discount - beauty is in the eye of the beholder?

Meanwhile, just bought a jar of 500g Comvita UMF5+ (RRP - $56) for $33.95 - 40% discount.

Wonder what that is telling us when CVT is crying poor over bad harvest.

It likely trades at a premium because it's on the ASX. They understand capital value going forward whereas everybody here just moans about the PE.

40% discount, lol. Still forking out $67.90 per kg for it, and that's only the +5

Like I said before, the new Chinese owners will clear all the stock easily.

[winner69]

OGG ...as a matter of interest when was A2 Milk Company Ltd formerly A2 Corporation in administration

Just curious ...as Brian Gaynor says it’s good being curious ...makes you a better punter

[Ogg]

OGG ...as a matter of interest when was A2 Milk Company Ltd formerly A2 Corporation in administration

Just curious ...as Brian Gaynor says it’s good being curious ...makes you a better punter

Dunno, just read it online somewhere, might not be true. I think it was trading under a different name. It was back in 2006 or something. In any case, there was a time when the company struggled...Just look at Bellamy's and how quickly that's turn around in the last year. Balance is trying to imply that the discounts are somehow I sign that the company isn't selling as well. The supply chain is complicated and prices fluctuate. Ask those Bellamy's shareholders who bought back in early 2017.

[steveb]

Hey winner perhaps it was called Happy Cow Milk Co back then!

[Ogg]

OGG ...as a matter of interest when was A2 Milk Company Ltd formerly A2 Corporation in administration

Just curious ...as Brian Gaynor says it’s good being curious ...makes you a better punter

It's on the wikipedia page https://en.wikipedia.org/wiki/The_a2_Milk_Company and also here https://www.nzx.com/files/documents/companies/ATM/20_Annual_Report_2005.pdf and also here http://www.abc.net.au/site-archive/rural/qld/stories/s1245678.htm

I think it was "A2 Dairy Marketers", one of their Australian subsidiaries or something, not quite sure, not the parent company. Share price was 8 cents back then.

[dobby41]

OGG ...as a matter of interest when was A2 Milk Company Ltd formerly A2 Corporation in administration

Just curious ...as Brian Gaynor says it’s good being curious ...makes you a better punter

According to their Wiki page it was in November 2003
"The company, which had been in a tenuous financial situation since beginning trading in May, went into administration in October[15] and was liquidated in November, owing farmers and processors tens of thousands of dollars.[6][15] A $1.27 million federal government grant awarded to the company in August as part of the Regional Partnerships Program was also cancelled.[16] A2 Corporation set up a new subsidiary and licensee, A2 Australia, to market and produce its product. A2 Australia established new contracts with the dairy farmers who had A2 herds, promising better payment terms—a week in advance instead of once per month, after shipment.[6]"

http://www.abc.net.au/site-archive/rural/qld/stories/s1245678.htm

[Ogg]

One deserves to trade at a PE premium and the other at a PE discount - beauty is in the eye of the beholder?



New primary sector index was established today: https://www.nzx.com/announcements/317043


NZX analysis shows that since 2011, the S&P/NZX Primary Sector Index has increased 327%, compared to the S&P/NZX 50 index up 153%. The PE ratio of the S&P/NZX Primary Sector Index is 30.2X compared to 19.2X for the S&P/NZX 50.

So the average PE among the NZ primary sector is 30. What's Comvita's PE today again, I forgot? :p It's share price in 2011 was around $1.70...winning!

Those who think that Comivta should trade on a 10 PE are just loony. I might buy some Sea Dragon shares next. Who ever buys CVT will recapitalize SEA, it's a bargain at 0.004.

[Valuegrowth]

Taking decisions by following short term analysis or short term speculation on assets will miss the biggest gain or will make losses. It is known fact that no company or any other asset can make similar performance almost every year and every quarter. But there are some things to monitor and study.

Does the company have long term business?
Does the company is building cash while managing debt level prudently?
Will the company stand out from the rest while facing competition successfully if they have competition?
Does the company have products with sufficient market potential to sustain sales for at least several years?
Does the management have a strategy and determination to develop products and services?
What is the company doing to maintain profit margin?
Can we satisfy with their research and development, cost analysis and accounting controls?
Does the company have above average marketing organization?
Does the company reduce or increase marketing and research cost?

According to above link Companies included in the S&P/NZX Primary Sector Index are:

• The a2 Milk Company Limited
• Comvita Limited
• Delegat Group Limited
• Foley Family Wines Limited
• Fonterra Shareholder’ Fund
• Livestock Improvement Corporation Limited (NS)
• New Zealand King Salmon Investments Limited
• PGG Wrightson Limited
• Sanford Limited (NS)
• Scales Corporation Limited
• SeaDragon Limited
• Seeka Limited
• Synlait Milk Limited (NS)
• T&G Global Limited
• Tegel Group Holdings Limited

Out of above which one has more value and can consider as safe investment? Which company has the potential to become an outstanding company? Thanks in advance.

[Ogg]

Taking decisions by following short term analysis or short term speculation on assets will miss the biggest gain or will make losses. It is known fact that no company or any other asset can make similar performance almost every year and every quarter. But there are some things to monitor and study.

Does the company have long term business?
Does the company is building cash while managing debt level prudently?
Will the company stand out from the rest while facing competition successfully if they have competition?
Does the company have products with sufficient market potential to sustain sales for at least several years?
Does the management have a strategy and determination to develop products and services?
What is the company doing to maintain profit margin?
Can we satisfy with their research and development, cost analysis and accounting controls?
Does the company have above average marketing organization?
Does the company reduce or increase marketing and research cost?

According to above link Companies included in the S&P/NZX Primary Sector Index are:

• The a2 Milk Company Limited
• Comvita Limited
• Delegat Group Limited
• Foley Family Wines Limited
• Fonterra Shareholder’ Fund
• Livestock Improvement Corporation Limited (NS)
• New Zealand King Salmon Investments Limited
• PGG Wrightson Limited
• Sanford Limited (NS)
• Scales Corporation Limited
• SeaDragon Limited
• Seeka Limited
• Synlait Milk Limited (NS)
• T&G Global Limited
• Tegel Group Holdings Limited

Out of above which one has more value and can consider as safe investment? Which company has the potential to become an outstanding company? Thanks in advance.

I'll answer the questions in respect to Comvita:

Does the company have a long term business?
Yes.

Is the company building cash while managing debt level prudently?
No.

Will the company stand out from the rest while facing competition successfully if they have competition?
They don't have competition (lol, OK maybe just a little, but answer still yes)

Does the company have products with sufficient market potential to sustain sales for at least several years?
Yes.

Does the management have a strategy and determination to develop products and services?
Don't know.

What is the company doing to maintain profit margin?
Praying to the weather Gods.

Can we be satisfy with their research and development, cost analysis and accounting controls?
Some what satisfied but could be better.

Does the company have above average marketing organization?
Leading brand in it's category.

Does the company reduce or increase marketing and research cost?
I guess it's increasing.

Re the index. I would probably buy all of those companies. The index would make a good retirement/Kiwisaver investment. Investing in NZ food company's is as risk free as it gets. It's performing just as well as high cap USA tech stocks. A2 Milk does look overvalued though. I think Tegal is fairly priced now so would maybe buy it.

I'm more of a short term trader so can't really be of much help, I just get bored easily. If I had like $10m I would just buy the index and retire rather than trying to pick stocks like Comvita and make 30% short term with all the stress.

[Valuegrowth]

Thank you ogg for your answers. Some investors ignore Agriculture related stocks. But there are outstanding companies in this sector too. Already some boring Agriculture (food) related stocks have become multibaggers in the Asia Pacific region. All types of selling, shorting and volatility in quality stocks will create some great opportunities.

[Valuegrowth]

I heard some were talking about end of honey bee. They also think that declining bee population could pose a threat to global agriculture. In my view those who make use of environmental friendly sustainable agricultural practices could become winners in the long run.I also found an interesting
article.

https://www.stuff.co.nz/environment/99580630/native-bees--small-solitary-and-under-threat (https://www.stuff.co.nz/environment/99580630/native-bees--small-solitary-and-under-threat)


https://www.youtube.com/watch?v=dY7iATJVCso

[Ogg]

https://www.nbr.co.nz/article/government-business-manuka-honey-project-falls-short-targets-vy-p-215000

Is this good news or bad news, I can't unlock it as don't have NBR subscription, lol?

[Beagle]

With all your profits you can't afford a $35 a month subscription ? Do you really expect to read quality business journalism for free ? Surely not ? Who pays for the journalists salaries ?
I won't indulge your free ride tendencies other than to post a bit of realism for others benefit.
Behind the paywall lead article in today's NBR has well respected FCNZ analyst talking about CVT's track record of shocking downgrades and against a company forecast of $400m of sales in 2021 is forecasting just $273m per annum in sales three years hence. In effect they are saying CVT's management are incompetent when it comes to forecasting and you should take company forecasts with a grain of salt. I see $3-4 downside if / when the potential suitor walks away. Maybe $1 perhaps $2 if they are really, really silly, upside if they proceed. Odds on proceeding are less than 50/50 in my opinion based on shocking recent years results. I think there are deep systemic issues within the company and its management of resources and thorough due diligence given how long its been going on for already and still proceeding will show these issues up to prudent buyer.

Good luck to holders, I think you'll need it !

[Ogg]

With all your profits you can't afford a $35 a month subscription ? Do you really expect to read quality business journalism for free ? Surely not ? Who pays for the journalists salaries ?
I won't indulge your free ride tendencies other than to post a bit of realism for others benefit.
Behind the paywall lead article in today's NBR has well respected FCNZ analyst talking about CVT's track record of shocking downgrades and against a company forecast of $400m of sales in 2021 is forecasting just $273m per annum in sales three years hence. In effect they are saying CVT's management are incompetent when it comes to forecasting and you should take company forecasts with a grain of salt. I see $3-4 downside if / when the potential suitor walks away. Maybe $1 perhaps $2 if they are really, really silly, upside if they proceed. Odds on proceeding are less than 50/50 in my opinion based on shocking recent years results. I think there are deep systemic issues within the company and its management of resources and thorough due diligence given how long its been going on for already and still proceeding will show these issues up to prudent buyer.

Good luck to holders, I think you'll need it !

I sold out this morning for a small profit. Not because of that but because I need some money to help out a family member who's buying a house. Might pick up a NBR subscription with the loose change.

I maintain my bullish prediction that this will get taken over @ $8+ minimum.

[Ogg]

$7.20...What's this, the last top up before the $10+ buy out ah, :D (too bad I'm out)

[Beagle]

The Board cannot provide any further comment or guidance at this stage, other
than the fact we should expect to be in a position to further update the
market by mid-May 2018.

Its now mid May. D Day looms large. Upside maybe $1, downside is probably $2-3. I don't like those odds on a 50/50 outcome at best.

[Balance]

Its now mid May. D Day looms large. Upside maybe $1, downside is probably $2-3. I don't like those odds on a 50/50 outcome at best.

$2.50 downside - that's my pick if the takeover does not go through. Means the potential bidder has done the due diligence and decided to walk away as CVT is not worth the current valuation.

[RGR367]

$2.50 downside - that's my pick if the takeover does not go through. Means the potential bidder has done the due diligence and decided to walk away as CVT is not worth the current valuation.

If I remember it right, based on ST sentiments and at 550 back then, CVT was already overpriced :) :)

[Beagle]

Given the share price sensitivity of this forecast update, the Comvita Board
believes it is obliged at this time, to disclose that Comvita is party to a
Confidentiality Agreement with a third party, pursuant to a due diligence
process currently being conducted on the Company. This process, which has
been ongoing for several months, is to enable the third party to assess the
potential acquisition of all or substantially all the shares in Comvita,
whether by way of takeover, scheme of arrangement, amalgamation or other
business combination.

What they said in mid April. It strikes me that this has now become unusually protracted. given that due diligence had already run several months in mid April.
Perhaps the buyer is absolutely dazzled and trying to wrap their head around CVT's "world class" management systems and procedures.
This is starting to look rather ominous for shareholders. I struggle to see the value in a company with clearly defined horticultural risks trading at 35 times current year earnings and its looks like the buyer might be struggling to see the common sense of that too.
Sure some of their products are actually quite good but 35 times is too rich, a bit like their overtly optimistic forecast of $400m sales by 2021, or have they quietly pushed that target year out again already ?

[Balance]

What they said in mid April. It strikes me that this has now become unusually protracted. given that due diligence had already run several months in mid April.
Perhaps the buyer is absolutely dazzled and trying to wrap their head around CVT's "world class" management systems and procedures.
This is starting to look rather ominous for shareholders. I struggle to see the value in a company with clearly defined horticultural risks trading at 35 times current year earnings and its looks like the buyer might be struggling to see the common sense of that too.
Sure some of their products are actually quite good but 35 times is too rich, a bit like their overtly optimistic forecast of $400m sales by 2021, or have they quietly pushed that target year out again already ?

" ....... we should expect to be in a position to further update the market by mid-May 2018".

2 days past mid-May 2018 and no update.

Have a suspicion that deal is off and management are drafting statement of 'excuses' to explain?

Very successful old timer investor told me years ago about takeover deals - 'the good ones happen very quickly'.

2 days past mid May when CVT stated it expected to be update the market.

[Balance]

I hope someone who is a shareholder of Comvita has sent a request to either Comvita or NZX or FMA to remind them of Comvita's continuous disclosure obligation.

Having let the 'cat' out of the bag with extremely favorable price impact, Comvita will be well aware that if the potential acquirer walks away - the sp is going to tank.

Many days past the 'update the market by mid-May 2018' - especially when you consider that the potential acquirer has been doing due diligence for many months.

[Beagle]

I hope someone who is a shareholder of Comvita has sent a request to either Comvita or NZX or FMA to remind them of Comvita's continuous disclosure obligation.

Having let the 'cat' out of the bag with extremely favorable price impact, Comvita will be well aware that if the potential acquirer walks away - the sp is going to tank.

Many days past the 'update the market by mid-May 2018' - especially when you consider that the potential acquirer has been doing due diligence for many months.

Yes if one were to take the view that May is equally divided in three parts into early May 1-10 May, Mid May 11-20 May and late May 21-31 May then clearly if there is no announcement by Monday the very least CVT should do (if they are interested in good governance) is to update the market on where this thing is at.

[Balance]

Yes if one were to take the view that May is equally divided in three parts into early May 1-10 May, Mid May 11-20 May and late May 21-31 May then clearly if there is no announcement by Monday the very least CVT should do (if they are interested in good governance) is to update the market on where this thing is at.

No announcement yet to place stock in trading halt - seems to be no takeover deal?

The Chinese (if indeed it is them) will be wanting their pound of flesh after buying in at $10 plus on huge potential which has been dissipating with each passing year?

In their shoes, I would pull the plug and let the sp fall (my pick - $2.50 down) and let the market sweat it out.

[Beagle]

No announcement yet to place stock in trading halt - seems to be no takeover deal?

The Chinese (if indeed it is them) will be wanting their pound of flesh after buying in at $10 plus on huge potential which has been dissipating with each passing year?

In their shoes, I would pull the plug and let the sp fall (my pick - $2.50 down) and let the market sweat it out.

I think this is yet another shocking example of the companies lack of respect for the continuous disclosure requirements of the NZX.
Time after time we have had really shocking downgrades, the extent of which really stretches credibility that management wouldn't have known a severe downgrade was coming a lot earlier than when it was officially announced to the market. Perhaps downgrades should be monthly in future, (assuming they are actually using 21st century accounting systems and are doing monthly accounts), but really as mentioned earlier they should simply cease giving any forward guidance whatsoever in the future because its quite clear they have very limited, if any, forward visibility.

I know Forest went to one of the annual meetings and came away unhappy with the "answers" he received so its not like they give you the real story in person either.

[winner69]

It all started turning to custard for CVT when they changed their balance date a few years ago

Gave them a couple of years grace in hiding things .....like confusing the market with normalised earnings over different periods and all that sort of stuff.

I think they even confused themselves.

That was a red flag.

[forest]

Yeah they seem to confuse themselves also by thinking SEA is worth investing in. Or is that donating to?

[forest]

Balance you are so right, CVT just announced : The subsequent discussions between Comvita and that third party have now concluded with no agreement on a transaction. The due diligence process and further consideration of any proposal to acquire Comvita, is now at an end.

[winner69]

Good they ‘captured valuable insights’ about global markets

[bull....]

this could get nasty

[steveb]

not a single buyer to be found at the mo!Lowest seller at $6.30,so what price would you guys buy at?

For me not at any price, Thankfully I never fancied this stock,you can never tell what mother nature has in store

[Balance]

Balance you are so right, CVT just announced : The subsequent discussions between Comvita and that third party have now concluded with no agreement on a transaction. The due diligence process and further consideration of any proposal to acquire Comvita, is now at an end.

Never trusted the Comvita board and management - far too many discrepancies to their announcements and pronouncements over the last few years to rely on their utterances on anything.

https://www.nzx.com/announcements/318243

A few observations:

1. ".... in negotiations we could not bridge the considerable distance between us on price". Looks the offer price was $3.50 and the directors (with their rose tinted glasses on)thought $7.00?

2. " ....has the effect of diversion of Executive and Board time from the day to day operation of the business". As if this has made any difference in the past when presumably they devoted 100% of their time to day to day operations and got their forecasts, 100% wrong three years in a row!

3. " .... a great deal of insight was gained during the due diligence process". Eh - what about the other party getting privy and considerate insight into all of Comvita's businesses and operations?

I get the very strong impression that the party doing due diligence was the one who uncovered the massive profit downgrade.

[Balance]

I sold out this morning for a small profit. Not because of that but because I need some money to help out a family member who's buying a house. Might pick up a NBR subscription with the loose change.

I maintain my bullish prediction that this will get taken over @ $8+ minimum.

You are lucky, very very lucky that level heads prevail on this thread and this site.

$8+ minimum?

Time to guess where the bottom will be.

I pick $3.29.

[horus1]

Buy at 5.5

[Balance]

Buy at 5.5

Short-covering buyers waiting in glee.

[steveb]

no point in having a stop loss in place with the buyers around the $5.30 mark.

If the price goes low enough ATM might be interested!

[Balance]

no point in having a stop loss in place with the buyers around the $5.30 mark.

If the price goes low enough ATM might be interested!

A few eager beavers got done at $6.50 I see when the market opened after 15 minutes post announcement.

[Ogg]

You are lucky, very very lucky that level heads prevail on this thread and this site.

$8+ minimum?

Time to guess where the bottom will be.

I pick $3.29.

lol

This is just deception and games by the Chinese. They want to buy it but they want it at the cheapest possible price. They lost the "act of surprise" when the directors said a take over was in the works so of cause they are pulling out so the price drops, then they will come back in. It's almost too predictable. Simple games really.

It won't drop below $6 IMO, like I said, the maximum downside is $1 tops. As you know I'm out with made a small profit. The skill here is to pick the bottom before negotiations start all over again. More easy money to be made.

Also, the announcement isn't showing on ASB? (edit, it is now, must have been delayed?)

[Balance]

lol

This is just deception and games by the Chinese. They want to buy it but they want it at the cheapest possible price. They lost the "act of surprise" when the directors said a take over was in the works so of cause they are pulling out so the price drops, then they will come back in. It's almost too predictable. Simple games really.

It won't drop below $6 IMO, like I said, the maximum downside is $1 tops. As you know I'm out with made a small profit. The skill here is to pick the bottom before negotiations start all over again. More easy money to be made.

Also, the announcement isn't showing on ASB? (edit, it is now, must have been delayed?)

Dreams are free of course - what happened to your $10 takeover price?

[Ogg]

Dreams are free of course.

I can't help it if gullible kiwis fall for this simple price manipulation tactic. Just lol if it drops to $4 then the take over happens at $5. If this was a private company it would be done and dusted by now.

The last take over attempt the buyers were complaining about the price, look what happened.

The smart thing to do would be to buy this dip. Sun Tzu 101 stuff here...

"Appear weak when you are strong, and strong when you are weak"

"Let your plans be dark and impenetrable as night, and when you move, fall like a thunderbolt."

[Balance]

I can't help it if gullible kiwis fall for this simple price manipulation tactic. Just lol if it drops to $4 then the take over happens at $5. If this was a private company it would be done and dusted by now.

The last take over attempt the buyers were complaining about the price, look what happened.

The smart thing to do would be to buy this dip. Sun Tzu 101 stuff here...

"Appear weak when you are strong, and strong when you are weak"

"Let your plans be dark and impenetrable as night, and when you move, fall like a thunderbolt."



Yes, and Cerebos must be thanking their lucky stars they did not pay the $4.50 the directors wanted at that time!

No Chinese is going to take over this dog - you read it here first.

There's plenty of manuka honey players out there now for them to buy - the ants, remember? :D

[winner69]

I can't help it if gullible kiwis fall for this simple price manipulation tactic. Just lol if it drops to $4 then the take over happens at $5. If this was a private company it would be done and dusted by now.

The last take over attempt the buyers were complaining about the price, look what happened.

The smart thing to do would be to buy this dip. Sun Tzu 101 stuff here...

"Appear weak when you are strong, and strong when you are weak"

"Let your plans be dark and impenetrable as night, and when you move, fall like a thunderbolt."



All warfare is based on deception. ....maybe the war s between CVT and its shareholders

and I like this one because at times I'm appear to be a bit thick

Pretend inferiority and encourage his arrogance.

[Balance]

All warfare is based on deception. ....maybe the war s between CVT and its shareholders

and I like this one because at times I'm appear to be a bit thick

Pretend inferiority and encourage his arrogance.

Surely not! You cannot be applying that to we know who?

:D

[Ogg]

Yes, and Cerebos must be thanking their lucky stars they did not pay the $4.50 the directors wanted at that time!

No Chinese is going to take over this dog - you read it here first.

There's plenty of manuka honey players out there now for them to buy - the ants, remember? :D

What happened to your $3 downside if it didn't go through?

Why would they buy shares at $10 and $7.20, then pull out after months of negotiating. They're not gonna buy another manuka company when they can get the best (and frankly only genuine one in the eyes of the Chinese consumer) for a huge discount.

[Ogg]

Surely not! You cannot be applying that to we know who?

:D

Who else would it be?

[Balance]

What happened to your $3 downside if it didn't go through?

Why would they buy shares at $10 and $7.20, then pull out after months of negotiating. They're not gonna buy another manuka company when they can get the best (and frankly only genuine one in the eyes of the Chinese consumer) for a huge discount.

Wait for it - the short covering buyers need to lock in their profits first. :D

Only CVT board and you believe in that nonsense of Comvita being the only genuine manuka honey - but hi, Comvita obviously have a few believers of that notion out there!

Fact is that the other players are selling heaps now via the health and souvenir shops/outlets to China buyers.

The ants, remember?


PS. Never seen such big ants in my life!

[Ogg]

Wait for it - the short covering buyers need to lock in their profits first. :D

Only CVT board and you believe in that nonsense.

The ants, remember?

Like I said before, if the price drops they'll want it even more, this is a done deal either way.

The stock is not gonna drop. For a food company sub $300m MC making a profit. It won't happen.

What we need now is some Kiwi investors with some balls with the long term vision of it's founder.

[Balance]

Like I said before, if the price drops they'll want it even more, this is a done deal either way.

The stock is not gonna drop. For a food company sub $300m MC making a profit. It won't happen.

What we need now is some Kiwi investors with some balls with the long term vision of it's founder.

Yup - the ants remember?

[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.

Posted 16 April. I think the directors aspirations in terms of value ignore the elephant in the room that this is an agricultural stock carrying massive weather risks.
I am not at all surprised that the interested party has walked away after yet another downgrade fiasco of Titanic proportions.
I think fair value is a VERY LONG WAY south of the current SP and obviously the interested party agrees however I would not be an investor at any price because I have no respect for management or the board after multiple year fiasco's with their forecasting.
Looks like the NZX will be stuck with this lemon for the foreseeable future.

Ogg should be very thankful for some very sage advice by some wise old heads on this thread.

[BlackPeter]

Broker just declined my order to buy some at $2 ... I think that's what they would be worth after spilling an inept board and clean out the management team. Broker seems to feel that I still offered too much - told me to review the offer. LOL.

I guess an opportunity to do something better with my money until the market is ready for my offer - and hey, it might drop over time ;);

[Ogg]

@Balance @Beagle

lol, you guy's are just way to conservative in a globalised world filled with cash.

If the take over party was looking for the last few months while the share price was $7+, then obviously they would pay that much today. The board was probably asking for $12, which would be fair if not for the downgrade which has obviously put a short term spanner in the works. The take over party knows if they don't buy it now and wait they risk next years season being good then the price will be double today. Might just have to settle for $8 in a months time.

If this was some generic run of the mill company, then obviously, then yeah, things would be bad now. That's why the short term downside was $1 at most.

[ratkin]

Posted 16 April. I think the directors aspirations in terms of value ignore the elephant in the room that this is an agricultural stock carrying massive weather risks.
I am not at all surprised that the interested party has walked away after yet another downgrade fiasco of Titanic proportions.
I think fair value is a VERY LONG WAY south of the current SP and obviously the interested party agrees however I would not be an investor at any price because I have no respect for management or the board after multiple year fiasco's with their forecasting.
Looks like the NZX will be stuck with this lemon for the foreseeable future.

Ogg should be very thankful for some very sage advice by some wise old heads on this thread.

You cannot altogether blame the company for the shareprice, it was investors driving it up to ridiculous levels that was part of the problem , how it ever got to 12 dollars was a mystery to me. For years it went on doing its little thing largely unnoticed with a shareprice of around 4.00 when it went over Six it suddenly went ballistic all the way to 12. You were one of its most vocal supporters during that time I seem to remember.

[Ogg]

You cannot altogether blame the company for the shareprice, it was investors driving it up to ridiculous levels that was part of the problem , how it ever got to 12 dollars was a mystery to me. For years it went on doing its little thing largely unnoticed with a shareprice of around 4.00 when it went over Six it suddenly went ballistic all the way to 12. You were one of its most vocal supporters during that time I seem to remember.

Sounds a bit like A2 Milk...The world has changed alot over the last few years. Premium established food brands operating in safety of well manged 1st world counties are in demand. Just a matter of time before the next take over attempt.

[Apathy]

lol

This is just deception and games by the Chinese. They want to buy it but they want it at the cheapest possible price. They lost the "act of surprise" when the directors said a take over was in the works so of cause they are pulling out so the price drops, then they will come back in. It's almost too predictable. Simple games really.



Who said it was Chinese - I heard it was a reverse takeover bid from SEA - they were going to issue 1 trillion billion million shares in return for controlling stake. Only fair they returned the favour and helped pump CVT share price for a while... :-)

[Beagle]

You cannot altogether blame the company for the shareprice, it was investors driving it up to ridiculous levels that was part of the problem , how it ever got to 12 dollars was a mystery to me. For years it went on doing its little thing largely unnoticed with a shareprice of around 4.00 when it went over Six it suddenly went ballistic all the way to 12. You were one of its most vocal supporters during that time I seem to remember.

I don't accept that and to be clear I am not blaming management for the SP. If people are foolish enough to still pay north of $6 for this mutt, good luck to them. Fact is company management have made a whole series of forecasts now that have proved to be recklessly and grossly inaccurate. This is an undisputed FACT.
At one point quite some time ago some people including myself thought management had credibility. We're a long way past that point now. The 20% gain from $10 to $12 was due to NZX50 inclusion. Some people cunningly took advantage of that temporary aberration in pricing due to index inclusion. Even now management have a $400m sales target as one of their aspirations for 2021. FCNZ, one of the more respected analysts and are in the mid-late $200m range somewhere from memory and are essentially calling out CVT's management as grossly optimistic and unrealistic.
I really think it belongs back under $4 and all this talk of high growth has been just that, talk that's come to nothing.
If the weather plays nice, every now and again they might make $17m which is about 40 cps and when we apply the time tested agricultural PE of 10 then we get a cyclical peak of $4. Why people are paying north of $6 still after all the recent fiasco's, go figure ?

[Ogg]

Price now $6.25...looks like they're just happy to buy it on market :D

edit, $6.31 now, seller at $6.50 ***it's happening***

[Balance]

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.


All very predictable actually.

[Apathy]

You cannot altogether blame the company for the shareprice, it was investors driving it up to ridiculous levels that was part of the problem , how it ever got to 12 dollars was a mystery to me. For years it went on doing its little thing largely unnoticed with a shareprice of around 4.00 when it went over Six it suddenly went ballistic all the way to 12. You were one of its most vocal supporters during that time I seem to remember.

NZX doesn't help - can someone explain to me how they have them showing a p/e of 5.49 and EPS of $1.23?

[blackcap]

NZX doesn't help - can someone explain to me how they have them showing a p/e of 5.49 and EPS of $1.23?

I can't find this information on the NZX? https://www.nzx.com/companies/CVT

Or am I missing something here?

[Balance]

I can't find this information on the NZX? https://www.nzx.com/companies/CVT

Or am I missing something here?

Try this ...

https://www.nzx.com/instruments/CVT

[Xerof]

I don't accept that and to be clear I am not blaming management for the SP. If people are foolish enough to still pay north of $6 for this mutt, good luck to them. Fact is company management have made a whole series of forecasts now that have proved to be recklessly and grossly inaccurate. This is an undisputed FACT.
At one point quite some time ago some people including myself thought management had credibility. We're a long way past that point now. The 20% gain from $10 to $12 was due to NZX50 inclusion. Some people cunningly took advantage of that temporary aberration in pricing due to index inclusion. Even now management have a $400m sales target as one of their aspirations for 2021. FCNZ, one of the more respected analysts and are in the mid-late $200m range somewhere from memory and are essentially calling out CVT's management as grossly optimistic and unrealistic.
I really think it belongs back under $4 and all this talk of high growth has been just that, talk that's come to nothing.
If the weather plays nice, every now and again they might make $17m which is about 40 cps and when we apply the time tested agricultural PE of 10 then we get a cyclical peak of $4. Why people are paying north of $6 still after all the recent fiasco's, go figure ?

All very well in hindsight - it wasn't a mutt until the board and management went barking mad

:D:D

my biggest regret - putting CVT in the annual comp, hoping for the takeover - it's going to spoil my christmas

[Balance]

All very well in hindsight - it wasn't a mutt until the board and management went barking mad

:D:D

my biggest regret - putting CVT in the annual comp, hoping for the takeover - it's going to spoil my christmas

Don't give up yet - Ogg reckons that the big monopoly ant Comvita may yet get taken over and it will not be successful unless the Chinese offers $10 per share.

[Ogg]

Don't give up yet - Ogg reckons that the big monopoly ant Comvita may yet get taken over and it will not be successful unless the Chinese offers $10 per share.

The take over will happen, it's just a question of when.

Your $3 downside call was just plain wrong. The stock has already come down from $12 and the market cap today is a meagre $280m.

I bet you in the next few weeks there'll be an offer on the table. They won't just walk away. This is all just part of their plan.

I'd admit $10 is probably not gonna happen "this year." I can see at least $8 in the short term, maybe $9 if they're lucky now.

Now that the share price has dropped, so has the expectations, therefore it's the same odds as before, $2/$3 upside vs $1 downside. I'd advise those who got trapped before to double down.

It will be interesting to see if $6 holds tomorrow. I bet you it does hold. Need to wait a few days for the volume to settle to see where it's at. If it drops below $5.50 (which it won't) I might get back in, but at that price I'll be in for the long term.

At the end of the day, this stock is just cheap compared to everything else in the world today. If it was trading on the ASX or was a private company it would be double the price today. Hell, even Capilano Honey on the ASX is almost as big as Comvita now.

[Balance]

The take over will happen, it's just a question of when.

Your $3 downside call was just plain wrong. The stock has already come down from $12 and the market cap today is a meagre $280m.

I bet you in the next few weeks there'll be an offer on the table. They won't just walk away. This is all just part of their plan.

I'd admit $10 is probably not gonna happen "this year." I can see at least $8 in the short term, maybe $9 if they're lucky now.

Now that the share price has dropped, so has the expectations, therefore it's the same odds as before, $2/$3 upside vs $1 downside. I'd advise those who got trapped before to double down.

It will be interesting to see if $6 holds tomorrow. I bet you it does hold. Need to wait a few days for the volume to settle to see where it's at. If it drops below $5.50 (which it won't) I might get back in, but at that price I'll be in for the long term.

At the end of the day, this stock is just cheap compared to everything else in the world today. If it was trading on the ASX or was a private company it would be double the price today. Hell, even Capilano Honey on the ASX is almost as big as Comvita now.

Careful about providing investment advice, Ogg - you could find yourself in FMA's sights if someone took your advice and lost money!

[Balance]

Like I said before, the new Chinese owners will clear all the stock easily.

Potential buyer was not Chinese - you read it here first.

[BlackPeter]

Now that the share price has dropped, so has the expectations, therefore it's the same odds as before, $2/$3 upside vs $1 downside. I'd advise those who got trapped before to double down.


You might want to familiarize yourself with the forum rules related to the promotion of securities and giving financial advise. And yes, its easy to get caught out providing financial advise, particularly if you do.

Particularly interesting however that you recommend people to buy securities you sold off yourself (as you admitted) ... A financial adviser on our forum who does not follow his own recommendations?

[winner69]

Potential buyer was not Chinese - you read it here first.

Chinese just waiting mate.

Sun Tzu tactics ‘He who knows when he can fight and when he cannot, will be victorious’

[winner69]

You might want to familiarize yourself with the forum rules related to the promotion of securities and giving financial advise. And yes, its easy to get caught out providing financial advise, particularly if you do.

Particularly interesting however that you recommend people to buy securities you sold off yourself (as you admitted) ... A financial adviser on our forum who does not follow his own recommendations?

May as well close the forum down then

[percy]

May as well close the forum down then

Certainly a very dangerous place for people who know no better.!

[Balance]

May as well close the forum down then

Remember the famous line from Wall Street (Martin Sheen) : "I don't sleep with no whore and I don't wake up with no whore!"

[Beagle]

The take over will happen, it's just a question of when.

At the end of the day, this stock is just cheap compared to everything else in the world today. If it was trading on the ASX or was a private company it would be double the price today. Hell, even Capilano Honey on the ASX is almost as big as Comvita now.

This stock is trading at 35 times current year forecasted earnings. I think you're seriously undermining your credibility on here claiming its cheap compared to everything else in the world today.
There's some mighty fine companies WITH great track records of doing what they say they will and growing fast trading at much lower PE's than that.
Manuka honey is not the elixir of life or a cure for cancer last time I checked BUT please feel free to post any medical studies that prove otherwise to justify the current price :)

[winner69]

This stock is trading at 35 times current year forecasted earnings. I think you're seriously undermining your credibility on here claiming its cheap compared to everything else in the world today.
There's some mighty fine companies WITH great track records of doing what they say they will and growing fast trading at much lower PE's than that.
Manuka honey is not the elixir of life or a cure for cancer last time I checked BUT please feel free to post any medical studies that prove otherwise to justify the current price :)

And that was a 50% earnings downgrade and share price only down 10% so far

Red herrings worked ....give the Chairman a chocolate fish ...r a IFINZ Award

[Balance]

This stock is trading at 35 times current year forecasted earnings. I think you're seriously undermining your credibility on here claiming its cheap compared to everything else in the world today.
There's some mighty fine companies WITH great track records of doing what they say they will and growing fast trading at much lower PE's than that.
Manuka honey is not the elixir of life or a cure for cancer last time I checked BUT please feel free to post any medical studies that prove otherwise to justify the current price :)

It's okay, Beagle.

Game's up for Ogg - ramping up the sp so he could/can sell out.

[Joshuatree]

Or this one from the wolf of wall street
Mark Hanna (https://www.imdb.com/name/nm0000190/?ref_=tt_trv_qu): The name of the game, moving the money from the client's pocket to your pocket.
Jordan Belfort (https://www.imdb.com/name/nm0000138/?ref_=tt_trv_qu): But if you can make your clients money at the same time it's advantageous to everyone, correct?
Mark Hanna (https://www.imdb.com/name/nm0000190/?ref_=tt_trv_qu): No.

[Joshuatree]

It's okay, Beagle.

Game's up for Ogg - ramping up the sp so he could/can sell out.

Not just Ogg, some dogs on here have been doing it both ways for years with continuous repetitive up and down ramps. Im pleased to note though that this is not as frequent and rammed like it used to be, hats off.

[steveb]

It's okay, Beagle.

Game's up for Ogg - ramping up the sp so he could/can sell out.

But you would have to be pretty dim witted to even consider taking Oggs advise.I only follow the thread for the laughs I get from Oggs replies!

[Balance]

But you would have to be pretty dim witted to even consider taking Oggs advise.I only follow the thread for the laughs I get from Oggs replies!

Haha - it was nice, wasn't it while he lasted?

The 'double-up' advice so he could sell what was left in his portfolio was a bit too much unfortunately.

[Ogg]

Haha - it was nice, wasn't it while he lasted?

The 'double-up' advice so he could sell what was left in his portfolio was a bit too much unfortunately.

lol. I told you I sold out at $7, check the thread a while back. I've got nothing in this.

My suggestion (**cough advice) was to buy in at $6.70 on the back of the take over announcement for a potential profit of $2 or $3 per share, with a downside risk of only $1. Even though it didn't turn out it was the right play.

I'm still confident a deal can be reached in the short term but it won't be the premium price "this year", however with the recent share price fall the odds are pretty much the same, so hence it's still in play.

The only ones laughing will the the take over party cause they've saved a heap of money on the back of a few Nervous Nellies.

[Beagle]

Crystal clear the board and the potential buyer are miles apart so any chance of this thing going ahead is predicated on CVT proving they can justify the price with repeated run rates higher than what they're (possibly ?) on target for this year. Of course if they do achieve higher profits in the years ahead, (aka the same profit they made years ago when the weather played nice) the board will consider their shares even more valuable because a PE of at least 50 is warranted for such a high growth company with such world class management and governance didn't everyone on here already know :D

[horus1]

Sarcasm is the lowest form of wit.A long term holder thru thick and thin. Will buy at 5.50

[Balance]

The take over will happen, it's just a question of when.

Your $3 downside call was just plain wrong. The stock has already come down from $12 and the market cap today is a meagre $280m.

I bet you in the next few weeks there'll be an offer on the table. They won't just walk away. This is all just part of their plan.



Bet on. How much are we betting?

[Ogg]

Bet on. How much are we betting?

lol, what are we betting exactly?...

If the take over party was doing due diligence "for months", that means they were looking at this while the share price was in the $7-$9 range. Therefore their take over price would realistically have been at least $9, possibly $10. BUT, throw in the recent downgrade and they probably dropped their offer price down to $7, a figure too low for the board to accept.

HOWEVER, if the share price drops further, to say mid to low $5s, it becomes interesting, as the questions is now "is $7 an acceptable price"? The take over could happen but it doesn't really help shareholders (the bet).

If it is the Chinese, who already have a 10% stake, this "game" could go on for years. They could possible buy another stake later this year, then make another take over attempt. If it is another party, then it's more likely they will either raise their offer or be gone for good, however, that raises the chances of the Chinese making a counter offer.

I'll bet that there isn't much downside. So, if you buy today and the share price drops to low $5s, then the take over party will be back with an offer at $6, thus you will break even. What I bet won't happen, is that the share price will drop to low $5s and the take over party doesn't come back. To sum up, if you buy today, you can't lose, worse case is you break even.

[BlackPeter]

Hmm - did it ever occur to you that the takeover party might have done something different than just staring at the share price for months on end to decide at the end that they don't want to pay more than market and the board deciding that they want more?

Maybe they actually did some due diligence and found out that the emperor is wearing no clothes ... just another overpriced cyclical agricultural stock with an inept board and management?

With current management and no growth this stock would look dear with a PE of 10, but it actually is in the mid 20'es. p;

[Beagle]

PE is 35 at the mid point of their revised forecast. (Whatever that forecast is worth).

[BlackPeter]

PE is 35 at the mid point of their revised forecast. (Whatever that forecast is worth).

Looks like I am still overvaluing this company ;). No, actually - I took the 3 year forecast and averaged it out. Agree however that it has little credibility - as any other forecast coming from its board.

[Balance]

The take over will happen, it's just a question of when.

Your $3 downside call was just plain wrong. The stock has already come down from $12 and the market cap today is a meagre $280m.

I bet you in the next few weeks there'll be an offer on the table. They won't just walk away. This is all just part of their plan.



lol, what are we betting exactly?...

If the take over party was doing due diligence "for months", that means they were looking at this while the share price was in the $7-$9 range. Therefore their take over price would realistically have been at least $9, possibly $10. BUT, throw in the recent downgrade and they probably dropped their offer price down to $7, a figure too low for the board to accept.

HOWEVER, if the share price drops further, to say mid to low $5s, it becomes interesting, as the questions is now "is $7 an acceptable price"? The take over could happen but it doesn't really help shareholders (the bet).

If it is the Chinese, who already have a 10% stake, this "game" could go on for years. They could possible buy another stake later this year, then make another take over attempt. If it is another party, then it's more likely they will either raise their offer or be gone for good, however, that raises the chances of the Chinese making a counter offer.

I'll bet that there isn't much downside. So, if you buy today and the share price drops to low $5s, then the take over party will be back with an offer at $6, thus you will break even. What I bet won't happen, is that the share price will drop to low $5s and the take over party doesn't come back. To sum up, if you buy today, you can't lose, worse case is you break even.

I thought the bet is this :

Refer your post above - "I bet you in the next few weeks there'll be an offer on the table."

So my bet is that there will not be an offer by 20 June 2018 - that's 4 weeks (more than a few weeks).

Shall we say $2,500?

Happy to make it higher if you like.

[Xerof]

Come on Balance - stop trying to take candy off a baby. You have information that says there is no take-over anywhere near the table "was not Chinese - you read it here first"

Asking Ogg to flip the double headed coin and you make the call is not cricket

[percy]

Come on Balance - stop trying to take candy off a baby. You have information that says there is no take-over anywhere near the table "was not Chinese - you read it here first"

Asking Ogg to flip the double headed coin and you make the call is not cricket

Ball Tampering,Under Arm Cricket.!!
Certainly not NZ cricket,or Sharetrader cricket.

[Balance]

Come on Balance - stop trying to take candy off a baby. You have information that says there is no take-over anywhere near the table "was not Chinese - you read it here first"

Asking Ogg to flip the double headed coin and you make the call is not cricket

He is soooo confident I figured I have to give him a chance to make some money off me.

[Ogg]

I thought the bet is this :

Refer your post above - "I bet you in the next few weeks there'll be an offer on the table."

So my bet is that there will not be an offer by 20 June 2018 - that's 4 weeks (more than a few weeks).

Shall we say $2,500?

Happy to make it higher if you like.

lol, yeah I dunno about the $2,500...

The problem is that there IS an offer on the table, it's just that it's not high enough for the board to accept. If the stock were to drop as much as you said it would, then the offer WOULD be high enough for the board to accept - it's a catch 22, so making a bet on the deadline is a bit pointless. In order for me to be right, the stock would have to drop alot, but then you'll be right, but then the buy out would likely happen, and then I'd be right again.

What I was really saying is that there's alot more left in this story and it's unlikely to be the end of it, and so there's more opportunities to trade it in the short term. The fact that the stock hasn't dropped alot, suggests that maybe another offer within 4 weeks may not be likely, but then again, if the stock isn't dropping, it's worth holding just in case something does happen.

Anyway, the question is what's the right move at any given point in time. It was definitely worth getting in at $6.70, and making a play with the take over even though it didn't work out, cause you've now had two days to get out at $6.10, so you've traded a small 60 cent loss on what could have been 2 or 3 times more on the upside. So what do you do now?...

Do you buy at $6, hoping that it's low enough that the board will get under pressure and be more reluctant to negotiate, at say $7, thus making yourself a quick $1. Or do you keep buying the dips and hold long term, hope things improve next season, and go for a bigger prize? Maybe do a bit of both, and pivot on any developments.

As the stock drops, the risk drops, the upside increases, more punters get in, more leverage is created etc... There's money to be made here, long term or short. That's why this stock should be on everyone's watchlist.

As for the bet, I dunno. I'd bet that something happens within 4 weeks that makes us all rush back here to talk about it. :D

[kiora]

Actually,as the inventory price drops the SP drops

[Balance]

lol, yeah I dunno about the $2,500...


I like to put my money where my mouth is.

So much for your utterances and confidence then.

[percy]

I like to put my money where my mouth is.

So much for your utterances and confidence then.

BIG mouth....................lol.

[Balance]

BIG mouth....................lol.

Yup - Ogg's mouth would make Mick Jagger envious? :D

[Ogg]

Yup - Ogg's mouth would make Mick Jagger envious? :D

lol, what do you think the bottom will be then, once the volume returns to normal?

[Beagle]

I like to put my money where my mouth is.

So much for your utterances and confidence then.

Words are cheap eh buddy ! Good on you for calling him out. P.S. I wouldn't even take the other side of that bet at 10:1 odds.

[Ogg]

Words are cheap eh buddy ! Good on you for calling him out. P.S. I wouldn't even take the other side of that bet at 10:1 odds.

lol, how about I'll let you guys know when I get back in CVT and we'll take if from there. I'm gonna wait until the volume drys up then may enter if it's low enough.

[steveb]

Yup - Ogg's mouth would make Mick Jagger envious? :D
yes it's interesting to look back at some of his posts some are quite outlandish,in nov last year he gave veritas 6 months tops,yet they are still around today.I just wish I was as thick skinned as him!

[Balance]

lol, how about I'll let you guys know when I get back in CVT and we'll take if from there. I'm gonna wait until the volume drys up then may enter if it's low enough.

Yup - back to the old pump, ramp and dump.

[ziggy415]

I'm shocked at some of the posters comments on this thread who appear to be acting like a gang of school ground bullies...no wonder people are leaving sharetrader if this is how we treat fellow posters...shame on you guys

[Beagle]

Looks like I am still overvaluing this company ;). No, actually - I took the 3 year forecast and averaged it out. Agree however that it has little credibility - as any other forecast coming from its board.

I had a look on 4traders to see if their are any broker forecasts in the market and according to them there aren't.
So looking back over the last 3 years and adjusting profit for the one off sale of their medihoney division last year and adjusting 2016 for 15 months down to 12 months we see results for 2015 - 2017 of $17.2m, $14.8m and $(5.5m) and $9.5m if they achieve their forecast for FY18. The trend is not very encouraging but lets be generous and take an average which is $9m.
9m / 45.57m shares = 19.75 cps. At $5.93 they're on a forward PE of 30, down from the silly 35 they were a little while ago.
I think they need to come back to a PE of around 10 - 15 to fairly reflect the very obvious agricultural risks including quite obviously significant weather risk and not to forget pestilence, (murtyle rust).
I see fair value somewhere between $2 - $3. Anything above that and you really have to start believing in management that they really can start to deliver growth against the factual observation that they simply are not. To be honest I am surprised anyone has any confidence left !

[BlackPeter]

I had a look on 4traders to see if their are any broker forecasts in the market and according to them there aren't.
So looking back over the last 3 years and adjusting profit for the one off sale of their medihoney division last year and adjusting 2016 for 15 months down to 12 months we see results for 2015 - 2017 of $17.2m, $14.8m and $(5.5m) and $9.5m if they achieve their forecast for FY18. The trend is not very encouraging but lets be generous and take an average which is $9m.
9m / 45.57m shares = 19.75 cps. At $5.93 they're on a forward PE of 30, down from the silly 35 they were a little while ago.
I think they need to come back to a PE of around 10 - 15 to fairly reflect the very obvious agricultural risks including quite obviously significant weather risk and not to forget pestilence, (murtyle rust).
I see fair value somewhere between $2 - $3. Anything above that and you really have to start believing in management that they really can start to deliver growth against the factual observation that they simply are not. To be honest I am surprised anyone has any confidence left !

Interesting - I do have in my spreadsheet still EPS forecasts for Comvita: 23 cents for 2018 and 41 cents for 2019. Pretty sure I didn't made these numbers up but took them from 4-traders. My last update of this company was on the 10th of May. This would make at current discounted price (I hear you ogg) an average forward PE of just 18.5 (given that the SP dropped since my last post ;p).

However - you are right (back to beagle), I just checked again and the EPS forecasts magically disappeared since then. Who knows, maybe the analysts got cold feet or have been part of the "due diligence" exercise and know now better :p?

Anyway - I think we are absolutely in agreement re the quality of the forecasts as well as the underlying value of the company (though I probably would push your proposed upper boundary of $3 somewhat lower.

No need to disagree on details - just lets sit back, take a bag of popcorn and watch the drama unfold.

[winner69]

Craig’s keeping the faith ....although not a buy anymore

http://www.sharechat.co.nz/article/65a626c2/comvita-s-400m-sales-target-pushed-out-two-years-after-poor-honey-harvests-craigs-says-businessdesk-editor-businessdesk-co-nz.html

[Balance]

Craig’s keeping the faith ....although not a buy anymore

http://www.sharechat.co.nz/article/65a626c2/comvita-s-400m-sales-target-pushed-out-two-years-after-poor-honey-harvests-craigs-says-businessdesk-editor-businessdesk-co-nz.html

Heavens help those who use their guidance to invest - $9 to $6.10?

A stock valued at PER of 36 times (!) whose fortunes are completely subject to the vagaries of the weather and nature for its sole ingredient (manuka honey) and is has been consistently running cashflow deficits?

[winner69]

Heavens help those who use their guidance to invest - $9 to $6.10?

Judgement might be clouded by Comvita having a Craig as Chairman

[Ogg]

Heavens help those who use their guidance to invest - $9 to $6.10?

A stock valued at PER of 36 times (!) whose fortunes are completely subject to the vagaries of the weather and nature for its sole ingredient (manuka honey) and is has been consistently running cashflow deficits?

Director buying today as well.

I'm a buyer at $5.50, maybe $5.75 if I see a strong platform develop.

[Balance]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/CVT/318412/279783.pdf

2,000 shares - tokenism at its worse given how badly the directors and management of this company have completely misguided the market with their forecasts in the last 2 years.

[Balance]

Wait for it - the short covering buyers need to lock in their profits first. :D


Short cover-ers backing off now.

If Craigs, the house broker, has a valuation of $6.10, those covering shorts know the stock will be coming to them - they just have to wait.

[Ogg]

Big dump...time to open the "buy screen".

[RGR367]

Big dump...time to open the "buy screen".

Not low enough still. Another 2 bucks off and could be then tempting :mad ;:

[Ogg]

Not low enough still. Another 2 bucks off and could be then tempting :mad ;:


gezz, you're tight, lol...

It's hard gonna be hard to pick the bottom. Not alot of buy support. Surely $250m MC is a fair balance between bears and bulls.

[Balance]

Not low enough still. Another 2 bucks off and could be then tempting :mad ;:


$3.75 - PER of 22 times for a company with a track record of missing forecasts, unreliable information and is totally dependent on the weather and bees to deliver its lifeline supply of one product?

You are easy to please!

[Beagle]

Craig’s keeping the faith ....although not a buy anymore

http://www.sharechat.co.nz/article/65a626c2/comvita-s-400m-sales-target-pushed-out-two-years-after-poor-honey-harvests-craigs-says-businessdesk-editor-businessdesk-co-nz.html

Its a sad joke. The $400m sales target two years ago has already been pushed out from 2020 to 2021 and now they think its 2023. Follow the trend. In two years time the target will be pushed out 3 years to 2026 and two years after that will be pushed out 4 years to 2030. What is the point of having a sales target that cannot realistically be met.
Who are they trying to con that this is a growth company when the EPS suggests the exact opposite ?
Normalising the profit for the last 4 years gives just on 20 cps. Until they can PROVE they are a growth company I think the standard no growth agricultural risk PE of 10 applies which suggests they're worth only $2 !

[Balance]

Its a sad joke. The $400m sales target two years ago has already been pushed out from 2020 to 2021 and now they think its 2023. Follow the trend. In two years time the target will be pushed out 3 years to 2026 and two years after that will be pushed out 4 years to 2030. What is the point of having a sales target that cannot realistically be met.
Who are they trying to con that this is a growth company when the EPS suggests the exact opposite ?
Normalising the profit for the last 4 years gives just on 20 cps. Until they can PROVE they are a growth company I think the standard no growth agricultural risk PE of 10 applies which suggests they're worth only $2 !

To put in perspective just how truly horrible Comvita's performance has been, PGW has outperformed CVT by 141.4% in the last 2 years !!!!!!!

PGW sp up 74% (39c to 68c) and 19% dividend payout - total gain of 93%.

CVT sp down 50% ($11.55 to $5.76) and 1.6% dividend yield - total loss of 48.4%.

So why should CVT even trade on a PER of 10?

[Beagle]

To put how really bad Comvita's performance has been, PGW has outperformed CVT by 141.4% in the last 2 years !!!!!!!

PGW sp up 74% (39c to 68c) and 19% dividend payout - total gain of 93%.

CVT sp down 50% ($11.55 to $5.76) and 1.6% dividend yield - total loss of 48.4%.

So why should CVT even trade on a PER of 10?

What a shocker and a good question mate. Maybe a PE discount from standard well diversified no growth Agri shares (10) because all the risk is concentrated in one sector, one that's riddled with myrtle rust and very obvious weather dependency !

[Ogg]

@Balance @Beagle

Was gonna buy today, but got cold feet cause of you two bashing the stock, lol.

This is interesting...

https://www.nzbees.net/forums/topic/12034-comvita-take-over-bidmaybe/?page=2

It's disappointing that the $400m target has got pushed out but it's still on the table which is why this deserves a higher PE.

I'm thinking maybe one more day of highest volume, and then maybe next week return to normal? It's gotta be close to bottom. At $5.50, it's about $250m MC. I just don't see it going lower unless that $400m target disappears.

Lots more F5 tomorrow :D

[frostyboy]

What a shocker and a good question mate. Maybe a PE discount from standard well diversified no growth Agri shares (10) because all the risk is concentrated in one sector, one that's riddled with myrtle rust and very obvious weather dependency !

With a continued increase in managed hives aka hive density, American foul brood (AFB) is also a risk to the industry. It could decimate everything. There is also potential for new pests and disease to find its way to NZ that would mean more labour costs on hive management et

[BlackPeter]

@Balance @Beagle

Was gonna buy today, but got cold feet cause of you two bashing the stock, lol.

This is interesting...

https://www.nzbees.net/forums/topic/12034-comvita-take-over-bidmaybe/?page=2

It's disappointing that the $400m target has got pushed out but it's still on the table which is why this deserves a higher PE.

I'm thinking maybe one more day of highest volume, and then maybe next week return to normal? It's gotta be close to bottom. At $5.50, it's about $250m MC. I just don't see it going lower unless that $400m target disappears.

Lots more F5 tomorrow :D

9698

What a sad chart. Why would you think the price got to be close to the bottom? Which of the indicators is telling you that?

[Balance]

What a shocker and a good question mate. Maybe a PE discount from standard well diversified no growth Agri shares (10) because all the risk is concentrated in one sector, one that's riddled with myrtle rust and very obvious weather dependency !

Not to mention increased competition.

There are now more than 100 UMF certified producers where there were only 5 a few years ago.

The ole economics 101 says where there are super-profits, competition will enter and reduce that super profits.

[horus1]

Looks to me to have a base at about 5.50.

[Xerof]

With a continued increase in managed hives aka hive density, American foul brood (AFB) is also a risk to the industry. It could decimate everything. There is also potential for new pests and disease to find its way to NZ that would mean more labour costs on hive management et

Thats a little over the top. I agree with you on hive density. It's getting crowded by new entrants, and 1,000 new beekeepers per annum, mainly hobbyists.

But the reported incidence of AFB has been between 0.2% and 0.5% for the past 10 years. Double it for non-reported and undetected cases, and it's still very low. There is a step change in monitoring and audit checking about to commence, so I don't see AFB decimating the industry any time soon. If anything eradication might be closer to becoming a reality than is thought.

This doesn't have much to do with Comvita's performance, so I'll leave it there.

[peat]

9698

What a sad chart. Why would you think the price got to be close to the bottom? Which of the indicators is telling you that?

He could argue both the RSI being under 20, as well as it showing divergence.

[BlackPeter]

He could argue both the RSI being under 20, as well as it showing divergence.

RSI under 20 is only a valid indicator good if it returns through this line ;) and I don't see the MACD crossing over - do you?; But sure - after this steep drop it is an almost certain bet that we will see at some stage (not necessarily now) a dead cat bouncing ... which would form a very temporary bottom and could be a great opportunity for holders to get rid of this flea ridden dog;

Too many bad treated animals for me :p;

[Ogg]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/CVT/318412/279783.pdf

2,000 shares - tokenism at its worse given how badly the directors and management of this company have completely misguided the market with their forecasts in the last 2 years.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/CVT/318483/279879.pdf

More token purchases?

[Sideshow Bob]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/CVT/318483/279879.pdf

More token purchases?

$5,000 shares for $29k. Got $117k last year for being chairman.

[JayRiggs]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/CVT/318483/279879.pdf

More token purchases?

Neil bought them for his daughter.
Happy families :)

[Balance]

$5,000 shares for $29k. Got $117k last year for being chairman.

The one director I follow closely is Rob Campbell - this guy takes on a Chairman job only after he is convinced it is the right company for him and he is right for the company, and then he loads up on shares to show the colour of his money and his commitment.

Neil Craig buying is simply to try and save face - he has presided over 2 years of mismanagement as Comvita's Chairman. And don't forget the investment in SeaDragon - shows how lousy the company really is with its decision making process.

[winner69]

Do Comvita have a JV with that Capilano outfit in Australia?

[rooster]

Do Comvita have a JV with that Capilano outfit in Australia?

Yes, think it is called Medibee. 50% Capliano, 50% Comvita.

[Balance]

http://www.scoop.co.nz/stories/BU1805/S00715/australians-buzzing-about-new-zealand-honey.htm

"Manuka Health wins most ‘Trusted Honey Brand’ across the Tasman"

What happened to the giant 'Comvita'??????

[horus1]

Isnt Manuka Health owned by private equity. Do you trust them.

[winner69]

http://www.scoop.co.nz/stories/BU1805/S00715/australians-buzzing-about-new-zealand-honey.htm

"Manuka Health wins most ‘Trusted Honey Brand’ across the Tasman"

What happened to the giant 'Comvita'??????

Ants can do anything Balance

Good on them

[Balance]

Isnt Manuka Health owned by private equity. Do you trust them.

For goodess' sake, read the announcement.

[Sideshow Bob]

Isnt Manuka Health owned by private equity. Do you trust them.

Companies Register here:

https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/1542649?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages%2F companies%2Fsearch%3Fq%3Dmanuka%2Bhealth%26entityT ypes%3DLTD%26entityTypes%3DUNLTD%26entityTypes%3DC OOP%26entityTypes%3DASIC%26entityTypes%3DNON_ASIC% 26entityStatusGroups%3DALL%26incorpFrom%3D%26incor pTo%3D%26addressTypes%3DALL%26addressKeyword%3D%26 start%3D0%26limit%3D15%26sf%3D%26sd%3D%26advancedP anel%3Dtrue%26mode%3Dadvanced

But if you follow it all the way through about 5-6 companies with 100% ownership, you get to here as a split ownership:

https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/5788193/shareholdings

Mainly owned by PE, domiciled in Jersey.

[Ogg]

http://www.scoop.co.nz/stories/BU1805/S00715/australians-buzzing-about-new-zealand-honey.htm

"Manuka Health wins most ‘Trusted Honey Brand’ across the Tasman"

What happened to the giant 'Comvita'??????

http://www.homeoftrustedbrands.com.au/results.asp

Scroll down to "Infant Formula". A2 Milk no where to be seen. Just lol.

[Balance]

Ants can do anything Balance

Good on them

Fascinating, isn't it?

Reader Digest's survey is reasonably independent and there are some who actually believe that Comvita is the standard bearer for the manuka honey industry and the absolute giant!

Turns out not only not to be the case but it did not even come out within the top 3 in Australia.

[Sideshow Bob]

There is still the 'manuka' honey industry in Australia....

http://www.abc.net.au/news/rural/2017-10-27/australia-versus-new-zealand-manuka-honey-fight/9090716

So potentially Comvita cares little about Australia and fighting them in their own backyard, but concentrate on China instead??

Capilano was highly commended, so maybe left it to their JV instead.

[Balance]

There is still the 'manuka' honey industry in Australia....

http://www.abc.net.au/news/rural/2017-10-27/australia-versus-new-zealand-manuka-honey-fight/9090716

So potentially Comvita cares little about Australia and fighting them in their own backyard, but concentrate on China instead??

Capilano was highly commended, so maybe left it to their JV instead.

Heck of a dangerous strategy to focus principally on the China market - one stroke of the pen (as has happened with various products eg. Norwegian salmon and infant formula with colostrum) and the China government can shut down a product, a brand or a company!

[Balance]

Comvita's reason for drop in profits from poor harvests - simply does not stack up.

Here's proof from a badly affected player - summing up what anyone in the manuka honey industry has known for the last 2 years - increased competition with corresponding drop in margins from many new players to obtain the unsustainably huge margins available a few years ago.

https://www.nxt.co.nz/companies/ONL/announcements/318773

Excerpt : "However pricing for Manuka Honey then dropped sharply in China. Margins evaporated and it became apparent that there was an over-supply of Manuka Honey in China with suppliers aggressively discounting their product. While the market has now recovered, margins are still significantly less than they were two years ago".

[Ogg]

Comvita's reason for drop in profits from poor harvests - simply does not stack up.

Here's proof from a badly affected player - summing up what anyone in the manuka honey industry has known for the last 2 years - increased competition with corresponding drop in margins from many new players to obtain the unsustainably huge margins available a few years ago.

https://www.nxt.co.nz/companies/ONL/announcements/318773

Excerpt : "However pricing for Manuka Honey then dropped sharply in China. Margins evaporated and it became apparent that there was an over-supply of Manuka Honey in China with suppliers aggressively discounting their product. While the market has now recovered, margins are still significantly less than they were two years ago".

What's this? Some ant coming up with excuses as to why their stuff isn't selling :D

The market was saturated with fakes.

[kiwidollabill]

What's this? Some ant coming up with excuses as to why their stuff isn't selling :D

The market was saturated with fakes.

The market is saturated with genuine, low grade manuka from NZ/Oz.......

[Balance]

The market is saturated with genuine, low grade manuka from NZ/Oz.......

You may be able to enlghten, kiwidollabill - told by a manuka honey farmer that most of the high UMF honey (which were fetching top prices) which were sold in previous years had their UMF level artificially increased by heat treatment.

Problem is that the UMF level drops back quickly after a few months and this was uncovered by the Germans and UK labs.

Hence, the huge volume of low grade manuka honey available today.

PS. Comvita would have been a huge beneficiary of the artificial high UMF levels as it was the biggest player in the industry until 2 years ago.

[kiwidollabill]

You may be able to enlghten, kiwidollabill - told by a manuka honey farmer that most of the high UMF honey (which were fetching top prices) which were sold in previous years had their UMF level artificially increased by heat treatment.

Problem is that the UMF level drops back quickly after a few months and this was uncovered by the Germans and UK labs.

Hence, the huge volume of low grade manuka honey available today.

PS. Comvita would have been a huge beneficiary of the artificial high UMF levels as it was the biggest player in the industry until 2 years ago.


Heat treatment (you can do the same thing by 'aging' the honey) and how it affects DHA/MGO levels (UMF ratings) has been well known for many years, this is caught out by high HMF levels in testing so not many keep trying to play this trick anymore.

Alot of the 'high grade' manuka isnt able to be imported into China (legally) because the beekeepers do so much sugar feeding (and manuka is early flowering) that it doesnt pass the C4 sugar test. Is is rare for anything higher than 15+ to enter China through the formal channels. There is alot of low grade arround because to pass the C4 test the honey companies (esp CVT) have to dilute the manuka with something else - NB: honeysuckle/clover honey is often used for this purpose and one of the reasons why that too is so expensive in the supermarket.

If you look at the CVT reports, they have been sitting on historically ALOT of inventory despite the fact the seasons have been so poor.

[Balance]

Heat treatment (you can do the same thing by 'aging' the honey) and how it affects DHA/MGO levels (UMF ratings) has been well known for many years, this is caught out by high HMF levels in testing so not many keep trying to play this trick anymore.

Alot of the 'high grade' manuka isnt able to be imported into China (legally) because the beekeepers do so much sugar feeding (and manuka is early flowering) that it doesnt pass the C4 sugar test. Is is rare for anything higher than 15+ to enter China through the formal channels. There is alot of low grade arround because to pass the C4 test the honey companies (esp CVT) have to dilute the manuka with something else - NB: honeysuckle/clover honey is often used for this purpose and one of the reasons why that too is so expensive in the supermarket.

If you look at the CVT reports, they have been sitting on historically ALOT of inventory despite the fact the seasons have been so poor.

Game is up for Comvita - it is but an agricultural stock subject to the vagaries of nature.

Will take a few more years of proof before the die-hards start to realize so all the better for those who see the light to get the hell out while the diehards continue to hold and buy more shares!

[Balance]

Game is up for Comvita - it is but an agricultural stock subject to the vagaries of nature.

Will take a few more years of proof before the die-hards start to realize so all the better for those who see the light to get the hell out while the diehards continue to hold and buy more shares!

https://www.nzherald.co.nz/the-country/news/article.cfm?c_id=16&objectid=12062153

Sign of the times - wholesalers moving into retail to capture the retail margins.

CVT - slip, sliding away

[Balance]

https://www.nzx.com/announcements/319114

Tokenism on a grand scale!

[Beagle]

https://www.nzx.com/announcements/319114

Tokenism on a grand scale!

I couldn't agree more. TA looks almost as sick as FA on this stock.

[Ogg]

https://www.nzx.com/announcements/319114

Tokenism on a grand scale!

lol, that's pretty funny. The previous disclosure was an on market sell.

I dunno what to say. I'm watching this everyday. Still haven't re-entered. I'm gonna chuck $100k on this, just a question of when.

[Beagle]

lol, that's pretty funny. The previous disclosure was an on market sell.

I dunno what to say. I'm watching this everyday. Still haven't re-entered. I'm gonna chuck $100k on this, just a question of when.

I'd de-risk such a brave investment by waiting until it breaks up through the 100 day moving average if I were you, (assuming this ever happens lol) but I get this funny feeling you'll ignore this good sensible risk mitigation suggestion so it'll wish you good luck as well because I think you'll need it :eek2:

[stoploss]

lol, that's pretty funny. The previous disclosure was an on market sell.

I dunno what to say. I'm watching this everyday. Still haven't re-entered. I'm gonna chuck $100k on this, just a question of when.
AB’s are paying 1.03 tomorrow night might be a better bet :)

[Ogg]

I'd de-risk such a brave investment by waiting until it breaks up through the 100 day moving average if I were you, (assuming this ever happens lol) but I get this funny feeling you'll ignore this good sensible risk mitigation suggestion so it'll wish you good luck as well because I think you'll need it :eek2:

Maybe I'll wait for the 30 day MA. This recent drop/sell down is on low volume. Just no support/buyers except for management, lol...Might buy some TME shares believe it or not, what you reckon?


AB’s are paying 1.03 tomorrow night might be a better bet :)

Thanks for the lols.

[Beagle]

TME a far better bet than CVT in my opinion. http://www.4-traders.com/TRADE-ME-GROUP-LTD-10363019/consensus/
Interestingly that's a share that's hardly ever discussed on here which is probably a good sign lol
Reasonable PE given its entrenched position and reasonable growth projections and dividend yield. Brokers have a very wide spread of opinion.

Not one I follow or own but doesn't look too bad. Technical's look okay too.

[Marilyn Munroe]

The overseas investors that were running the ruler over Comvita have departed but not to worry its onward and upwards;

"Comvita buys 20% stake in Uruguay's Apiter for US$6.25M"

http://www.scoop.co.nz/stories/BU1806/S00460/comvita-buys-20-stake-in-uruguays-apiter-for-us625m.htm

Boop boop de do
Marilyn

[winner69]

CZZ Capilano Honey being taken over

Just imagine CVT on these multiples

For Capilano shareholders, the Cash Consideration of $20.06 per share values Capilano’s equity4 at approximately $189.7m, representing:


28.2% premium to Capilano’s closing share price of $15.65 on 10 August 2018;
25.3% premium to Capilano’s VWAP for the 30-day period ($16.01) ended 10 August 2018;
a P / E multiple of 19.3x (financial year end 30 June 2018);
and an EV / EBITDA multiple of 12.5x (financial year ended 30 June 2018).

[Ogg]

CZZ Capilano Honey being taken over

Just imagine CVT on these multiples

For Capilano shareholders, the Cash Consideration of $20.06 per share values Capilano’s equity4 at approximately $189.7m, representing:


28.2% premium to Capilano’s closing share price of $15.65 on 10 August 2018;
25.3% premium to Capilano’s VWAP for the 30-day period ($16.01) ended 10 August 2018;
a P / E multiple of 19.3x (financial year end 30 June 2018);
and an EV / EBITDA multiple of 12.5x (financial year ended 30 June 2018).



Wow. So CZZ is getting bought out for NZD $211m, while CVT is worth NZD $250m, just lol, market is so dumb. Time to just shut down the NZX and move everybody over to the ASX main board.

[winner69]

Comvita announces FY resultbtoday

Always an interesting event

[bull....]

Comvita announces FY resultbtoday

Always an interesting event

its a disaster

https://www.nzx.com/announcements/322500

and they do not have confidence going forward as they have dropped there div policy going forward

[BlackPeter]

its a disaster

https://www.nzx.com/announcements/322500

and they do not have confidence going forward as they have dropped there div policy going forward

Don't be that harsh - I guess they still made a profit and not a loss, i.e. the share must be worth something :p;

Agree however that I would see this "something" significantly lower than the market does ;);

[winner69]

its a disaster

https://www.nzx.com/announcements/322500

and they do not have confidence going forward as they have dropped there div policy going forward

Need to cut divie because they are a high growth company

Positive outlook for F19 ...that’s good

[bull....]

Need to cut divie because they are a high growth company

Positive outlook for F19 ...that’s good

haha need more funds for fish oil?

[Balance]

its a disaster

https://www.nzx.com/announcements/322500

and they do not have confidence going forward as they have dropped there div policy going forward

Underlying profitability and margins all going backwards but wait!


Outlook

The history of honey harvests in New Zealand shows that empirically a third consecutive poor honey season is unlikely. However, we are in the process of continuing to evolve the operating model of our Apiary business to reduce the financial exposure in the event of another poor harvest. In particular, we have further reduced the fixed cost overhead in the Apiary business and used our considerable body of scientific knowledge to select hive sites that optimize profitability.

It is very early in the new financial year. However, we are confident that given the changes we have made to our Apiary model, our renewed focus on China and the US market opportunities and an increase in marketing spend at the expense of fixed overhead costs, we have a positive outlook for FY19. We will provide a further update at our Annual Shareholder Meeting on 18 October 2018.


SO ALL GOOD, folks. Happy honeybees!

[BlackPeter]

LOL - this quote from the announcement made my day (highlights by me):


This payout ratio signals a change in policy from 40-45% of after tax profits, to a range of 25-30% of operating profit after tax. The Board believes a change to this lower payout ratio is more appropriate for a high growth company with ongoing demand for cash to fund growth.

Wouldn't you recognize a high growth company by high growth?

But than - they say a third bad year in a row (referring to the weather, not the board performance) is unlikely. What a relieve to the believers.

Just wondering whether they read all this stuff about climate change ... What would a long, hot and dry summer with plenty of wild fires interrupted by a handful of deluges do to their honey harvest?

Unlikely? We shall see.

[Blue Skies]

Though v tempted, relieved I never bought into CVT despite all the excitement & serious hype a few years back...miracle health properties, dominant brand, unlimited potential, China etc.

Definitely have to thank Beagle, BlackPeter, Balance, Winner & a few others on here for dodging this one.

Whenever I think of CVT, always reminded of Winner69's story of neighbour's 'mates at the bowling Club' selling AIR at a loss & buying CVT at close to $13 with some talking of the SP heading towards $20. That was just before the first lot of bad news. Wonder what happened to them? Should have hung on to AIR.

[Beagle]

I can't take any credit mate, I admit I got sucked into the hype of this but thanks in no small way to Winner I started to see more clearly as time went on. Thanks Winner, I owe you a beer.

Couldn't agree more BP. Love the bit that "we have a positive outlook for the year" They should add that this statement is contingent upon satisfactory weather, no new pests or diseases and no more widespread expansion of the existing myrtle rust problem and market demand.

In other words a no growth agricultural stock with all the risks that poses. Anyone paying more than a historical PE of 10 should head to their nearest doctor to ensure they take the appropriate medication to heal up from their susceptibility to beleiving corporate B.S.

EPS was just 18 cents per share and yeap, $1.80 is all I think they're really worth.

[Ogg]

What the CVT share price graph looks like:

9865
https://i.imgur.com/nLtxMS1.jpg

What the CVT share price graph really looks like:

9866
https://i.imgur.com/JXbrIgL.jpg

[Blue Skies]

Outlook 'The history of honey harvests in NZ shows that empirically a third consecutive poor honey season is unlikely'.

Can imagine next years copy saying.... empirical evidence suggests bad luck comes in threes, so a fourth is virtually impossible. :)

[Ogg]

Up 5%, another take over attempted coming?

[bull....]

Capilano caught with fake honey

https://www.canberratimes.com.au/business/companies/buying-fake-honey-as-simple-as-a-google-search-20180904-p501qo.html?crpt=homepage

i watched a good documentary on netflix about how honey producers mix there honeys with rice syrup. lucky comvita has the real deal a

[kiwidollabill]

Capilano caught with fake honey

https://www.canberratimes.com.au/business/companies/buying-fake-honey-as-simple-as-a-google-search-20180904-p501qo.html?crpt=homepage

i watched a good documentary on netflix about how honey producers mix there honeys with rice syrup. lucky comvita has the real deal a

How do you know they have the real deal? The point is that rice (and sugarbeet) syrup cant be picked up with the typical tests....

[Blendy]

A huge jump in price - 19c today, up to $6.49. There's sellers all the way to $8 - is something big about to be announced?

[BlackPeter]

A huge jump in price - 19c today, up to $6.49. There's sellers all the way to $8 - is something big about to be announced?

Not sure I would get my hopes too much up (if I were a holder). Neglegible volumes so far - only 700 went through at $6.49;

And if you look at the depth it might be more interesting to look at what the buyers are prepared to pay rather than what some sellers might wish to get.

I do see some sort of support at $6.15;

Looking at the TA: I admit that the growth the recent days looks interesting (if you just look at the SP). However - low (and diminishing) volumes and RSI now close to 90 (quite overbought) - personally I would think that a bounce back under the MA200 is more likely than a further rise.

But hey, that's just my uninformed TA view. From a fundamental perspective would I not know why anybody would want to buy at that price ... unless they managed to turn honey into gold or something but didn't tell the markets yet.

[winner69]

Not quite a profit upgrade but things looking honky dory from here and F19 will be a good year


http://www.sharechat.co.nz/article/d8c3d19b/comvita-says-new-strategy-should-lift-annual-sales-earnings.html

[BlackPeter]

Not quite a profit upgrade but things looking honky dory from here and F19 will be a good year


http://www.sharechat.co.nz/article/d8c3d19b/comvita-says-new-strategy-should-lift-annual-sales-earnings.html

I highlighted the keywords in the announcement ...


Comvita says a new strategy focusing on its core mānuka honey products and securing supply should drive higher sales and earnings.

Chief executive Scott Coulter told shareholders at today's annual meeting the new strategy should start paying dividends in the current financial year. That includes splitting Comvita into two separate divisions, one focusing on supply and the other on branding and sales. The company hopes this will lower overhead costs for both divisions and provide a stronger outlook further out.


Some wise man once said "hope is not an investment strategy" ....

[winner69]

My wife has Hanz honey Manuka blend on her one peice of toast in the morning.Think the last jar was about $18 from Pack'nSave.Think a jar lasts her about 3 months.
I have one green kiwi fruit before my two slices of toast with Crunchy peanut butter,no added sugar or salt.[on special at Pack'nSave $3.50 a jar last week]
I think it is all in the mind.Wife says her honey is good for her,while I have not had a cold since starting my day with one kiwi fruit.

Percy — you tried Pic’s peanut butter. Great little business in Nelson.

They seem to be going into other things now ....like Pic’s Blueberry Jelly

[Ogg]

Is this getting cheap again or is it insiders selling out on the outlook of this years honey season?

I think, normally around this time of year you can predict how good the season for honey will be.

Warmer ocean temperatures and more rainfall = another disaster season? I don't know, I'm not a meteorologists.

[Apathy]

Is this getting cheap again or is it insiders selling out on the outlook of this years honey season?

I think, normally around this time of year you can predict how good the season for honey will be.

Warmer ocean temperatures and more rainfall = another disaster season? I don't know, I'm not a meteorologists.

PE of 30 isn't really cheap - I think probably back to where it should be but still carries plenty of risk with supply issues and China access.

[BlackPeter]

Is this getting cheap again or is it insiders selling out on the outlook of this years honey season?

I think, normally around this time of year you can predict how good the season for honey will be.

Warmer ocean temperatures and more rainfall = another disaster season? I don't know, I'm not a meteorologists.

Didn't they say last time around that there never will be three bad years in succession? Maybe they lied ... but more likely is they just demonstrated their incompetence.

Yes, lots of rain is bad for bees.

Ah yes - and I certainly would not use the attribute "cheap" in the context of the current CVT shareprice. Cut it in half, and I might be prepared to call it "fair" considering its seasonality. Not so sure though considering the bad luck its board and management seem to suffer from. Maybe they should try next time to pick their leaders based on competence? Just a thought.

[kiwidollabill]

Word on the street is that the harvest so far has been 'ok'. Highly dependent on Jan/Feb weather for the large Manuka tracts in the central NI. Anyone a meterologist?

[Ogg]

Word on the street is that the harvest so far has been 'ok'. Highly dependent on Jan/Feb weather for the large Manuka tracts in the central NI. Anyone a meterologist?

One bad season = normal
Two bad seasons = bad luck
Three bad seasons = climate change?

All I know is that the oceans temperatures around NZ at the moment are 1-2 degrees higher than normal. Which is a lot. There's been a higher than average amount of rain lately, but maybe it will stop by next month.

https://www.metservice.com/rural/monthly-outlook


For November: Monthly rainfall totals exceeded 120 percent of normal across the eastern North Island and exceeded 200 percent (double normal) along the east coast of the South Island


Continued rainfall volatility from week to week.