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This company is definitely worth a closer look at current share price of $4.12. Recent fall from around $5.30 has happened on no real news and is most likely the result of CCC being relatively expensive on a P/E basis at that price. Also short listed history, low liquidity and exchange rate movements (NZD:EUR) are relevant. If it falls to below $4, I will consider increasing my small holding.

 

However, the company has a long history of growth. It has a strong balance sheet, a growing core business in specialist cables and hose reels and 4 embryonic businesses which could be close to contributing to rapid, profitable growth. Not frequently discussed and only just starting to see regular coverage by brokers. Fourth quarter report is now on the web-site (although not yet notified on the NZX). Order book is EUR38m at 31 Dec, up 12.7% on same time in 2006 and cumulative order intake for the year was EUR133.7m (up 8.8% on prior year).

 

Return on invested capital is satisfactory and the company looks to me to be one of the soundest potential growth stories on the NZX. Best to review the presentations on the web-site to get an overview of the business.

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Full year result out and on target at $NZ14.0m NPAT. Growth is not as high as past years, largely due to the effect of higher taxes from NZ base - an increase from around 27% tax in prior years to around 37%. This may be reduced in future years if proposed amendments to tax on foreign earnings come into effect (I haven't checked where this is at lately). At prior tax levels, the result would have been $NZ16.3m, up a creditable 27% (and in line with historic levels of growth).

 

I value CCC at around $5 per share, with strong potential for further upside from growth in embryonic businesses and will probably accumulate more shares at around current levels ($4.00).

 

More detail on results is available here.

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  • 1 month later...

Cavotec isn't one for announcing every little sale, but the media centre on the web-site testifies to progress across all their development businesses - moormaster sales, AMP energy systems, remote radio control and a strategic partnership with IATA which relates to the airport "pop-up pits".

 

Remains one of my preferred NZ stocks for long term growth potential, exchange rate exposure, benefit from tax changes and value - while it's not superficially cheap, it is still available at below my current valuation of $4.98 although some more liquidity would be nice! (Liquidity might also see this one in the index.)

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  • 2 weeks later...

Increase in order intake for the last quarterly was a little lower than I'd expected - although at least still continues in the right direction. These things can of course be a little bumpy, so early to make a call on the year.

 

New acquisition announced sounds complementary to existing businesses, although insufficient information to determine whether it represents value.

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AGM presentation out today along with new Moormaster orders announced. Forecasting full year 2008 revenue of Euro 143m (up 10%) with EBIT of 14m (up 11%). Given probable reductions in NZ tax payable, I think this could see NPAT at around 9.5m Euro (up 30% if I am correct there). Currently also looking at around another 5% improvement on forex translation back to NZD I think. So up around $NZ19m NPAT looks feasible for a forward P/E of about 14 on current share price of $4.20.

 

That probably looks around fair value in current market and on EBIT growth rate, but with the specialised products, exposure to macro trends, and currency exposures, I remain a big fan. My current valuation is $4.98 with upside.

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And new uptrend confirmed...

 

OBV step was a bit early on the warning signal in this case, but it did flag that the end of downtrend should be taken seriously. ;)

 

Not really a liquid stock for short term trading though, so will be interested to see how the longer term trend plays out here.

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Oh my god Liz, you are a closet chartist :blink: and you are talking to your self. Should I be worried?

 

just thought I would drop in and say hello. As you know I dont hold anything on the NZX except a wee play with LMP the other week and that share whoes name can not be spoken out loud.

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Lol Strat! Nice to see you. Believe it or not, there are a few advantages with posting to myself:

  • I get to see my own performance - I can't bury my comments!
  • Never have to go on the defensive because someone questions my logic (or sanity!)
  • Don't have to worry about influencing anybody else unduly!

 

Having said that, company is always welcome really B)

 

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Ive used similar excuses for not going out at night from time to time. :P

 

How are you playing the market these days? I have no faith in this wee rally we are having right now ( I assume the NZX is having one too but actually I dont really know :rolleyes: ) Im trading only with plays I expect to come to fruition in less than a month or two and holding a few dogs as well of course.

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Hi Strat,

 

I was largely a seller from around June last year through to December and was lucky to lock in quite a few profits. Sadly, being the woman that I am, I also then spent plenty of them... :rolleyes:

 

I'm not really good at macroeconomics, so I'm still hanging on to quite a few of my "special cases". As you remember in Tommy's poll on the other channel, I was feeling pretty bullish around Easter (well, actually, I was feeling sick to the stomach and ready to build a bunker, which I suppose mentally equates to "bullish". Lol!). As it happened, that was probably a fairly good time to be buying and I am pretty glad with the smattering of buys I made. However, logically I would rate the probability of a second down wave as quite high at the moment - it's just not possible to tell how big it will be. Confidence can do strange things to markets.

 

Meanwhile, I have had a record month so far for April (which is always a bit of a worry) and so I am naturally taking a few profits. At the same time, many of my individual stock charts still look surprisingly bullish - but I am just monitoring closely. I let TA have a little more say when I am feeling uncertain - especially in the selling process when I only need to monitor a limited number of stocks.

 

Longer term, I am actually feeling more positive about the NZX than I have felt in a long time. I have been bringing money back from Aussie and UK over the past year whenever the NZD falls close to or below the long term averages - and there have been a few good opportunities. Unfortunately, I made the mistake of putting some of that money into bonds, which didn't hold up as well as I'd hoped... Anyway, as I see it, both NZ and Aussie have huge in-pourings of cash and while housing and the consumer may be on hold for a while longer, the government will have plenty of options...if we get a labour govt again, look for fiscal stimulus (i.e. govt spending - Welly property market and infrastructure/services). If we get a Nat govt, perhaps more monetary stimulus (i.e. OCR cuts - long-dated vanilla bonds, Auckland property and a little easier on property and retail. Although I suspect even there that the bias will be more fiscal.

 

Regards commodities, I have a vague theory that the end of the boom will be marked by a dramatic oil spike.

 

Market risk and cycles should be feared and respected, but I think they should only rarely keep investors out of the market completely - and I will be unable to resist continuing to invest in what I see as "special cases" whatever the mood of the market.

 

Sorry the ramble - probably explains why I don't get much company :lol:

Liz

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