If you believe in analyst forecasts - forward PE is roughly 21 and forward earnings CAGR is 8. Based on these forecasts SP looks about right.
Obviously - analysts are about as often wrong as they are right, but still ... there might be potential.
Market might as well see a new and quite promising management team. I guess, it doesn't work always if they hire top guns, but if it does - the sky might be the limit. If you didn't look at the story they told in the last AGM, now might be a good time to look at it.
David Banfield (CEO since a bit more than a year) turned Methven from a tired disappointer into a star performer - and the CFO (Nigel Greenwood) used to be one of the main contributors to bring SML to its previous heights. He left Synlait before they took the dive - i.e. just watch his moves - if & when he is leaving CVT, watch whether the music might stop .
Anyway - hold a medium sized parcel and not worried :
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"Prediction is very difficult, especially about the future" (Niels Bohr)
... actually - just checked the latest analyst consensus which went upwards after the recent announcement. Forward P/E (based on analyst estimates) is now below 20 and forward earnings CAGR would be 10.
Again - analysts are sometimes right and sometimes wrong, but so is everybody else when looking into the future. However - based on these numbers CVT does not appear to be too dear.
----
"Prediction is very difficult, especially about the future" (Niels Bohr)
... actually - just checked the latest analyst consensus which went upwards after the recent announcement. Forward P/E (based on analyst estimates) is now below 20 and forward earnings CAGR would be 10.
Again - analysts are sometimes right and sometimes wrong, but so is everybody else when looking into the future. However - based on these numbers CVT does not appear to be too dear.
Thanks BP. I appreciate the posts. I must admit I threw out the 'overpriced' line to see if any holders would come riding to CVT defense and peak my interest. Your posts did so I have done some research and have come to the conclusion CVT is a good bet.
The new strategy makes a lot of sense. Management team are stars as you say and the story makes for compelling reading, easy to get on board.
The one thing I haven't figured out is why are they forecasting only mid single digit revenue growth? That's more in line of a mature company no? I thought with China and North America the growth could be double digit or at the very least high single digit?
I love the margin improvement and bottom line growth but top line is still important.. gains from cutting middle management and simplifying the business only happen once.
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Originally Posted by Rawz
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