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Thread: Comvita - CVT

  1. #946
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    Quote Originally Posted by Ogg View Post
    You can make carpet, clothing, and sell insurance anywhere in the world.
    Sounds like they struggling to make Manuka honey in NZ , who knows if another poor season follows .Also pretty sure the same "properties " exist in honey from some of those trees in Aussie , so not really unique imo.

  2. #947
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    I'm in at $6.85 .... (Knowing my luck it should start to fall)

  3. #948
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    Quote Originally Posted by Ogg View Post
    I'm in at $6.85 .... (Knowing my luck it should start to fall)
    In the green already, should have got more.

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    Quote Originally Posted by Ogg View Post
    In the green already, should have got more.
    Well done mate ....probably on a winner here when the $8,35 takeover comes.
    “I know that I am intelligent, because I know that I know nothng “ — Socrates

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    Quote Originally Posted by winner69 View Post
    Well done mate ....probably on a winner here when the $8,35 takeover comes.
    It was that post from Filthy that did it for me. It really could be A2 Milk as it would make sense. A 1:1 all stock take over would be nice!

  6. #951
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    Quote Originally Posted by Ogg View Post
    It was that post from Filthy that did it for me. It really could be A2 Milk as it would make sense. A 1:1 all stock take over would be nice!
    Haha - he who dares, wins!

    Well done on today!

  7. #952
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    Quote Originally Posted by Ogg View Post
    It was that post from Filthy that did it for me. It really could be A2 Milk as it would make sense. A 1:1 all stock take over would be nice!
    LOL I was thinking one for six is where this should really be but you should be lucky to get any shares in such a quality company. It won't happen. Article behind the paywall specifically mentions its an overseas company that's been doing due diligence. As I said earlier this latest downgrade fiasco coming hot on the heels of all the other massive downgrade fiasco's in recent years will probably have them running for the hills. This hugely problematic cyclical agricultural stock is currently trading at 35 times this years forecast earnings.
    Quite frankly I think that's absolutely ludicrous given their appalling track record and obvious weather dependency. Its a shame as some of their products are quite good but I think management have few real insights into making serious money from their current operations and I have no confidence that will change anytime soon. Put succinctly, its a flea and mange ridden mutt.
    Last edited by Beagle; 16-04-2018 at 05:16 PM.
    No butts, hold no mutts, (unless they're the furry variety).

  8. #953
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    I'll say it is probably the Chinese buyer who picked a fair few up a while ago, but what would I know?

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    Quote Originally Posted by Beagle View Post
    LOL I was thinking one for six is where this should really be but you should be lucky to get any shares in such a quality company. It won't happen. Article behind the paywall specifically mentions its an overseas company that's been doing due diligence. As I said earlier this latest downgrade fiasco coming hot on the heels of all the other massive downgrade fiasco's in recent years will probably have them running for the hills. This hugely problematic cyclical agricultural stock is currently trading at 35 times this years forecast earnings.
    Quite frankly I think that's absolutely ludicrous given their appalling track record and obvious weather dependency. Its a shame as some of their products are quite good but I think management have few real insights into making serious money from their current operations and I have no confidence that will change anytime soon. Put succinctly, its a flea and mange ridden mutt.
    It's a bit unfair calling it a dog with fleas. Long term trend is still good. Wasn't the last take over attempt at like $2 or something? This is definitely a difficult time for the company but that does present an opportunity for investors to take advantage of the value offered here. You gotta look at the big picture, there are 1.4B Chinese consumers looking for premium brands like this. There's tremendous global growth opportunity that keeps getting bigger. With a market cap around $300m while also making a profit, it's a fair price to pay. Especially for a company that's in advanced take over talks.

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

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

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    From the NBR today: https://www.nbr.co.nz/article/market...ises-da-214739

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

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

  11. #956
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    Weather conditions have impacted their honey production. These are sort terms issues. It may have long term growth but currently its valuation is not that attractive. In fact, I looked at their balance sheet. Comvita’s debt-to-equity ratio appears low and indicates that it still has room to increase leverage. I am currently doing some home work on future strong balance sheets firms.I like three types of companies.

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

    Can Convita improve their ROE and maintain growth?

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

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

    Can Convita improve their ROE and maintain growth?
    Aren't you struggling to get Comvita meeting any of these criteria

    Whwn was the last time Comvita cash flow positive?
    “I know that I am intelligent, because I know that I know nothng “ — Socrates

  13. #958
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    Comvita, through their convertible notes, has the potential to lift their stake in Sea Dragon to 22%.

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

    seadragon-graph.jpg

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

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

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

  14. #959
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    Do bees ever have a good productive season?

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

    Any slight glitch or poor management, blame it on the bees.
    Last edited by ratkin; 17-04-2018 at 05:12 AM.

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

    With the recent share price growth in A2 Milk, it has the leverage to be able to acquire both of these companies easily. On the other hand I doubt "China Resources" has the cash to buy Comvita outright. I could be wrong, but surely it would have lifted it's stake to 20% before making a take over?
    I could be all wrong, but I'm just trying to join all the dots here.
    It's an interesting theory and time will tell if you are right. Good luck with that!

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

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