One thing I keep reminding myself - NEVER invest or buy on the way down.
Picking bottoms are for the French!
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You may be correct, if so that would be an awesome call picking the bottom, a bounce at the 550 day moving average(!). The daily indicators all perked up a bit as well and as you pointed out the huge volume, Money Flow leapt back into positive territory. There's a buyer for every share sold, so clearly the bid side is optimistic as well.
Edit: Those spooky Fibs again, the $2.45 low bounce? is exactly 61.8% retrace of the entire move up from week ending July 17 2015. Make of it what you will.
On the daily trend basis however, and the weekly and monthly charts it's a mess, in a severe slice-your-hand-off-catching-the-falling-knife downtrend.
The stars are all in alignment ....even the NZX says its OK
Not much can go wrong now
Maybe $3 this week ... And then how much more
The impact on sales and margin of the change in tax of only 12% on grey imports in China has been breathtaking as far as CVT is concerned and the other minnow listed manuka honey company and also for other Australian listed health and wellbeing companies.
I think the risk to the sales target is to the downside and the risk to margin is very real. If sales for H2 FY17 are at the bottom end of guidance for the year $100m sales growth will have ostensibly stopped in this half compared to the PCP and that on issued shares that are 16% higher. If margins are also under pressure as I think they probably are from more intense discounting to try and maintain sales and a much higher $Kiwi there is quite a bit of potential for the EPS to really disappoint. If my base case comes true, (acknowledging predicting the future is extremely difficult at the best of times) the shares at $2.60 will be trading on a PE of 260 / 0.13 - 0.14 = 18.5 - 20.0 and that for a company with negative EPS growth. There remains plenty of risk to the downside in my opinion especially from a technical perspective looking at the chart but also from a fundamental perspective through both EPS and PE contraction as the stock is re-priced both for lower earnings and much slower medium term growth, (if any).
I see a lot of risk and a high chance of disappointment with this stock but what would a silly bean counting hound know about smelly stuff and special oils anyway... GLTH and I'll leave it at that.
Roger, still don't understand your argument. I understand you believe sales are hurting and margins may contract. But are you assuming they won't hit their EBITDA guidance? The guidance they effectively reaffirmed last week.
Otherwise I can't see how you are getting from EBITDA to EPS. We aren't expecting any surprise interest, depreciation or amortisation...
I understand that your view on the company is pretty negative (which is fine - good for discussion), but I just don't understand your numbers