CYG 0.00% $1.36 coventry group limited

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  1. 206 Posts.
    I think this baby will bounce but not in a significant way after this annual report released based on:

    (1) Operating Cash Flow in 1H has stopped bleeding...and according to history, 2H is usually weaker than 1H performance. So FY16 OCF probably won't turn positive.
    (2) Nil debts in balance sheet
    (3) The restructuring process has been largely completed so I expect no more significant impairment in the coming semi reports. So the current book value is kind of solid and PB at the moment of 0.42 implies deep margin of safety.

    CYG currently making loss is a distributor with Price/Revenue=0.25. Say if the restructure plan helps it turn profitable again, it should deserve a Price/ Revenue around 0.4 (slow turnover rate like EMB with gross margin above 30%) which should imply an 80%-90% jump on the current price in 6-7 months time.

    --------------------------------------------------------------------------------
    This above is not investment advice. Do your own research please.
    Last edited by medici: 18/08/16
 
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