Note a substantial by the Uhrig family company increasing sizeably. related to chairman i suspect, although close to reporting date ??. anyway you would think it is a positive. 14.5% to 15.5% +$11m --have i read this right/

Just saw that CDA director K Gramp bought $50k worth of stock at $3.88. she has experience as cfo of austereo and was on UWL board so looks like a numbers type person. doubles her holding. interesting

Wow big hole right where it hurts! actually that is not right. i thought the new businesses where vulnerable not detecting. what is most disappointing about this downgrade is not the downgrade itself, hardware sales are lumpy and with a dodgy (inconsistent) customer base you are bound it hit an air pocket every now and then. it is that i thought mgt was on top of this Sudan situation, it has been around for a while. it sort of feels they have little idea what is going on over there. maybe no one wants to get on the ground, understandable. i felt we were on teh way out of this mess not still diving into it. time in the sin bin for this stock. also a clear example why it is not a top quality stock, eg CSL as i have mentioned before.

disc held in SM and IR (42nd largest holding before today!)

Every results season throws up some “oddity” that I find cant be easily explained. To me this season one such stock was Codan (CDA). I have been reasonably familiar with this story over several years, and met the outgoing CEO a few times, but am only a recent holder.

The treatment meted out to CDA has been severe given the result and I thought it worthwhile having a closer look.

My first comment is that this market is occupied by trend followers to a greater extent than anything I have seen in 30 years of investing, the upshot of that is that stocks will trend way above and way below what are reasonable valuations, imo. Could be the case here to some extent. Both ways.

The companies record over a reasonably long period has been quite good. It is a leader in detecting equipment and spends on R&D to maintain that position. The company has used the cashflow from that division to acquire more in the communication area. All sound stuff so far.

Although having a tech slant there is a weakness in the variability of the base biz. This is due to the reliance on some areas such as Sudan and Afghanistan for a reasonable amount of demand, quantified to some degree in the last result. Some with longer memories will recall the issues around 2013/4 that saw sales fall dramatically and it took some time to recover, although sales again are impacted the declines are much more manageable nowadays. Probably scares some.

However this variability means the stock is not a CSL etc. and shouldn’t and now doesn’t trade like CSL.

So there is variability in earnings that the market should have known of and priced accordingly, didn’t happen, the stock trended too high, that has been over corrected now imo. Is the company over earning? Maybe to some extent but not dramatically imo.

The other area of interest are the acquisitions in the communication segment. In the past CDA record in this segment has been patchy. However mgt went out of their way to say all was well, although early days. There are big hopes here. Any disappointment would be severely dealt with by the market.

The surprising issue with this result is that there were/are risks but they appear to be handled well so far but the market has shot first. IMO that is why I hold and would look to add if more stability is forthcoming. That’s enough of a rant for a typing beginner!

Note CDA Director added about $80k at $10.37. given share price move interesting.

Disc Held IRL (new)