CDA

[galumay]

The last 12 months has been fantastic for CDA, a turnaround story I bought too early, but none the less patience has paid off in spades and reinforces my view that trying to time the market is pointless. I first bought at $1.85 and then averaged down at 97c and 65c for an average price of $1.30. The shares are now at $2.31 and as off the 16/17 AR my calculated range of Intrinsic Value is between $4 and $5. Even allowing for a larger margin of safety given the history of lumpy earnings i think they offer compelling value at anything under $3 so remain a strong Hold for me. Also worth noting they are now debt free.

HY1 18 a good solid result, in line with expectations, but Mr Market really liked it, up 10% post results. Holding

price maker, mainly through IP (patents), a little from branding because Minelab is becoming synonymous with metal detectors.

FY 2018. Another great year, business performing really well on all metrics, substantially increased my range of IV. Continuing to hold.

H1 19 Very solid result, unusually strong 1st h to the year. Predicting less growth in H2.


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[galumay]

FY2020 Stonking year for CDA, record revenue, profit and cash. Just about a 10 bagger on my cheaper parcel.

[galumay]

CDA H1 2021, another very strong half announced by CDA, just such a good business. Now also announced an acquisition, immediately accretive, paid in full with cash, no debt.

[galumay]

FY 2021, just spewing cash, a great business.

[galumay]

Hi 2022

On the income statement everything looks rosey, but the cash flow statement shows the true picture, for the first time in a decade, negative cash flow.

Company narrative is the increased inventory and capex is required to position the business for the challenges of covid, supply chain disruptions & inflation. Need to watch carefully to see whether they navigate these issues or the problems run deeper.

I was tempted to buy more as they dropped to just over $8 which is well below my range of IV, but the FCF issues are too big a red flag for me.

[galumay]

Topped up in the personal PF this week at $7. 12/4/22

[galumay]

Added to SMSF at $5.68 and also added more to personal PF at same price, 26/09/22

see decision journal here

[galumay]

CDA H1 2023 results were in line with my expectations and showed a steady turnaround in the business back towards former performance. Importantly the negative OCF turned positive again and FCF was about break even. Share price started to recover strongly as the market rerated CDA.

[galumay]

CDA Annual report for 2023 released. No surprises. The FCF is starting to improve, about $20m after adjusting for accounting distortions, not great conversion rate compared to NPAT, but heading in the right direction. Steadily reducing debt with further reduction telegraphed for 2024.

[galumay]

Good H1 for CDA, continued good improvement in FCF back to historical levels. Debt continues to be at the threshold of comfort for me, so need to watch closely.