Cobram Estate Olives Limited

ASX:CBO

Cobram Estate Olives Limited

ASX:CBO
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$1.950 (-3.5%)
Last close price
#303
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2
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Forum Topics CBO CBO General
Hackofalltrades
Added 2 years ago

They presented quite well today - they presented a lot of relevant information and useful graphs.

I think this is a business that some modelling might be useful for as NPAT only seems somewhat related to free cash flow due to the weird accounting things.

I'd also want to know exactly how they are correlated to the Olive Oil price. They mentioned it, but not in much detail.

It does feel like a product that is more likely to have price spikes than price gluts, particularly as the world gets richer.


Long term I'm not convinced their product won't be disrupted. It could be disrupted with things like alternative healthy oils or synthetic oils designed to taste like Olive Oil and potentially with all the health benefits.

9
Noddy74
Added 2 years ago

I agree - not a sector I've done a lot of work on, but they are interesting nonetheless.

When I've previously heard them present my impression has been that if it didn't work out as an investment, it wouldn't be because they weren't acting in the best interests of shareholders. Again, today they came across as very forthcoming and open. Lots of other things can go wrong but it's nice to be able to take one off the table.

Fun fact - when they listed they didn't raise a cent and there was no selling down by insiders. There was no public offer and no broker offer. They added just 65,000 shares and gifted them all to employees. The only reason they did it was because prior to listing they were effectively an unlisted public company with 705 shareholders, who didn't have an efficient way to add or reduce their holding. You don't see that sort of thing too often.

[Not held]

20
Slideup
Added 2 years ago

I remember looking at them when they listed and thought they were interesting and well aligned with shareholder but wanted to see how they fared as a public entity, time to watch the video I think!

From memory the production of the olives is pretty consistent but it is on a two year cycle crop so you will get a bumper crop followed by a smaller crop and to get an idea of production you need to average these periods. I thought it sounded like it could be a good cycle to trade into if the market got excited by high production numbers

7
AUROPAL
Added 3 years ago

Nice write up Noddy. Value Downunder (not sure if he's on Strawman) also did a great Twitter thread deep dive on Cobram Estate back in August which I recommend checking out.

I personally use Cobram Estate olive oil at home and would love to be able to invest in the company but like you I find the valuation too rich currently and I've bad experiences before with agricultural businesses, having bought Costa Group and still deep in the red 4+ years later.

12