Full year results, page-11

I saw some positive news which MAYBE might account for some of the recent uptick.

I buy Martin's Roth's TOP STOCK every year. To get new ideas but, I also like re-meet the companies and see what they are up to. I've found a few winners over the years which have paid off 1000 fold on my $30 investment.
You mostly see the upward movement in small to mid cap stocks. Which Codan now is.

Well, there was Codan!! (one of the top ASX stocks out of 1000's)

Mr.Roth has stringent criteria and that weeds out a lot of the crap stocks. It's a good reminder to me and the rest of the market that Codan is a solid company that's growing.

(You'd think and hope Codan's management team would be out there meeting more brokers and fund managers? They aren't!!!)

I've seen a few private equity deals go by recently and I think they are out there looking for value. I didn't buy Codan as a value play (or take-over target) but, I think we are now ONLY 2 months away (time flies!) from 1st half numbers and the NPAT should continue in the 20-30%+ range which will give this stock a massive boost. Who knows who's looking at the company.

You simply can't have companies growing at 20-30%+ and multiplies of 10-12 for long. The market will figure it out. No matter how hard the Board and management try and hide the companies success.

The current PE is around 10.

(It's import to remember the Codan's management doesn't give guidance. Too chicken. So the do it in a way to protect themselves but, it helps us. They list the brokers estimates. By law...THEY MUST announce to the market if there is a 10% change from "those" brokers estimates. It's the end of dec and the company basically knows the last 6 months results. So the numbers are just about a lock.)

I believe they'll come out with around 4 cents in Feb.
That will give them a trailing 12 month EPS of around 7.5 cent.

More so...if that's the number, it confirms growth...to even the biggest non-believers. The company should have a PE of 20-30.

You also have to consider they'll pay down even more debt and bump the dividend half a cent. Maybe more, if they aren't going to buy back stock.

So...simple math.

In February the stock will trade at
$0.75 cents at a PE of 10
$1.12 cents at a PE of 15
$1.50 cents at a PE of 20
$1.87 cents at a PE of 25
$2.25 cents at a PE of 30

Remember...the stock had a PE of 20+ for most of last year with higher debt and questions about the profit growth from the turnaround. Even at $1.50 it's STILL trading at a discount to it's growth.

Value, growth..dart board. No matter how you look at this...the stock is going up to $1.50 at some point in the next 3-12 months. Maybe sooner.

In 2 years...if the company grows at the same pace, it's EPS will be 20 cent! A PE of ONLY 15 gives this a $3 share price. You only get gifts like this, so often in life.