Are Codan Limited Shares a Buy?

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What Does Codan Do?

Codan Limited [ASX:CDA] is a company that designs and manufactures radio communication systems, metal detectors and mining technology.

What is Happening to Codan’s Share Price?

The stock is trading over a $1dollar, but is well off its all time high of $3.95 that it hit back in 2013. After seeing revenue, divisional profit and margins declined since then, the share has rallied somewhat recently as things have started to pick up in the first half of 2015.

What Now for Codan Shares?

I asked Greg Canavan, editor of Sound Money. Sound Investments. for his take on the company.
He says, ‘Codan’s valuation is reasonably attractive given this potential for a rebound in growth. It trades on a price-to-earnings multiple of around 13.8 times and a dividend yield of 3.5%. Keep in mind that Codan is investing in the business for growth, so the forecast dividend payout ratio for 2015 is only 57%. With Codan you have a situation where the business performance should pick up in the years ahead, after suffering a massive drop in profitability in 2014.’
If you’re interested in more of Greg’s analysis, start here.

Callum Newman
Editor, The Daily Reckoning

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Callum Newman

Callum Newman

Callum Newman is the editor of The Daily Reckoning and Associate Editor of Cycles, Trends and Forecasts. He also hosts The Daily Reckoning Podcast. Originally graduating with a degree in Communications, Callum decided financial markets were far more fascinating than anything Marshall McLuhan (the ‘medium is the message’) ever came up with. Today Callum spends his day reading and researching why currencies, commodities and stocks move like they do. So far he’s discovered it’s often in a way you least expect. To have Callum’s thoughts and insights on the current state of the currency, commodities and stock markets delivered straight to your inbox, take out a free subscription to The Daily Reckoning here.
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