CDA Shares Up 17% Higher on Better-Than-Expected Results (ASX:CDA)

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Radio and communications manufacturer Codan Ltd [ASX:CDA] is defying the market today.

Shares in this mid-cap stock are up 17.92% at time of writing. Well in the black, while the majority of the ASX is slumping in the red.

As for the reason behind the share price spike, it’s all thanks to some impressive sales data. A fact that has helped Codan investors recover some gains after a steep sell-off since mid-2021.

Let’s take a closer look…

Back in the right direction

Having provided a short and sharp sales update today, Codan may finally be reversing its fortunes.

A quick look at the stocks chart will show you just how far this mid-cap has fallen, dropping from almost $20 per share in June last year, to just $9.85 per share today.

Needless to say, that’s a hefty fall for a stock of any size, let alone Codan’s.

However, todays update came bearing better news. Management announced that their half-year sales topped $257 million — up 32% year-on-year. A result that should net the company roughly $50 million in profit, which is a 21% year-on-year improvement.

Better still, as global supply chains continue to feel the pinch, Codan seems to be unaffected. They even note that they have managed to increase their inventory holdings. So if demand holds up, they could be in a fantastic position to capture even more sales.

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It’s a great first step for shareholders, putting Codan back on a potential pathway to growth.

All they really need to do now is hope that the pessimistic market sentiment doesn’t take hold.

What’s next for the Codan Share Price?

Looking ahead, investors should look forward to the release of the full half-year results on 17 February. Reports that should contain far more detail for the market to dissect and evaluate.

And in the meantime, management simply needs to continue doing what it’s doing — building upon this solid first-half result in order to deliver an even better second half one.

As for whether you should invest in Codan right now, you’ll need to decide for yourself. But it is hard to argue against the fact that the stock looks like a great value play right now. Again though, the broader volatility could undo that very quickly.

So if you’re looking for ways to manage risk and learn to make money in volatile times, then you need to have a clear trading strategy. Something that our resident trading expert Murray Dawes knows all too well.

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Ryan Clarkson-Ledward,
For Money Morning

PS: Our publication Money Morning is a fantastic place to start on your investment journey. We talk about the big trends driving the most innovative stocks on the ASX. Learn all about it here

About Ryan Clarkson-Ledward

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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