Originally Posted by
Beagle
What a shocking and perennial disappointer this company has been. It would appear the company can only earn ~ $17m when all their weather stars align and in a normal weather year, (read less favorable than historical averages due to climate change) the company is somewhere around $10m which is really quite pathetic.
At the mid point of their forecast $9.5m on 45.57m shares that gives EPS of just 20.85 cps.
Now...you tell me what the right PE is given this is clearly an agricultural share with more than its fair share of risks, Murtle Rust forgotten by anyone ?
Talk of growth over the years has amounted to just that, Talk.
My standard time tested approach with cyclical argi companies is to apply a default PE of 10 and then adjust for other factors such as potential growth in various aspects of their business. In my opinion there would have to be really major synergies and cost cutting involved by any company looking to acquire Comvita to justify anything like the current share price and I note with due diligence already quite protracted there can be no assurance whatsoever regarding the possible outcome, indeed with this latest blow to their guidance on top of all the other guidance fiasco's in recent years its quite possible the potential buyer could run for the hills, I know I would !
I would rate this company a SELL.