Comvita - CVT

[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/...eport_2005.pdf and also here http://www.abc.net.au/site-archive/r...s/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/r...s/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? 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.