Comvita - CVT

[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

[Ogg]

https://www.nbr.co.nz/article/govern...ts-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, (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