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19-04-2018, 08:12 AM
#1011
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...
Last edited by Beagle; 19-04-2018 at 08:16 AM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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19-04-2018, 08:35 AM
#1012
i think this stock will drop big time if no takeover happens reminds me of red or black
one step ahead of the herd
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19-04-2018, 08:44 AM
#1013
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
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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19-04-2018, 09:14 AM
#1014
Member
Originally Posted by bull....
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.
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19-04-2018, 09:17 AM
#1015
What are the guys at the Bowling Club saying Winner? Are they backing up the truck again?
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19-04-2018, 09:20 AM
#1016
Originally Posted by Sideshow Bob
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
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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19-04-2018, 10:34 AM
#1017
Member
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?
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19-04-2018, 10:54 AM
#1018
Originally Posted by 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?
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/opin...akeover-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!
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19-04-2018, 11:27 AM
#1019
Originally Posted by Ogg
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/opin...akeover-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.
Last edited by Balance; 19-04-2018 at 11:28 AM.
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19-04-2018, 12:04 PM
#1020
Originally Posted by Balance
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.
Originally Posted by Balance
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.
Originally Posted by Balance
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.
Originally Posted by Balance
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.
Originally Posted by Balance
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.
Last edited by Ogg; 19-04-2018 at 12:06 PM.
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