Post of the Day!! :lol:
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ROIC is only 4.6% …this is return on all capital employed, equity plus debt
I’m sure CVT cost of capital is substantially higher than 4.6% …..PWC had 9.3% in a recent report …I’d say in reality higher.
Economic value destruction going on here ….big time methinks
So NPAT growth -13.5% and ROIC 4.6%
Why bother
One good thing is it's trading below the pe ratio of world markets. It's also a defensive play(consumer staples) People have to eat and drink in good and bad times. Other thing I am going to watch is their future earnings after acquisitions and expansion. Don't forget there will be grade demand for high quality food in the Coming decade. Asia Pacific region is home to 60 percent of the world's population. I bought few food stocks targeting population growth in the Coming decade. Future earnings are better than current earnings. Finally, CVT, s performance is not that bad given the environment of high cost of doing business. More than half of my portfolio consist with food which include few multibaggers.
Are you sure you understand Comvitas business proposition? They are clearly not the consumer staple you are talking about, providing some sweat spread for the breakfeast toast. They sell hype (i.e. the hope that their honey does miracles for your health): 500g of their honey cost 10 times the price of a normal jar of honey in the supermarket, and they try to get into the beauty business as well.
Might all work and turn out ot be very profitable (if it works out), but consumer staples they clearly are not.
Comvita Manuka Blend Honey 500g ----$13 at Pak'nSave
https://www.paknsave.co.nz/shop/product/5007828_ea_000pns?name=manuka-blend-honey
The real winner of this buiness is David Banfield . Do you see the 1,ooo,ooo dollars salary? It is marvelous, compared with 11 millions dollars profit for the whole business.