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I would like to know your views on CZZ and SGH. I have these shares because of their exposure to international markets and because they appear to be well run companies focused upon shareholders.
That said, both are down at present.
A: I have no idea why Capilano Honey (CZZ) is up 14.5% today (Tuesday), after falling 8% yesterday and being down more than 15% from last Thursday.
With this sort of volatility, I would be staying out.
I do know James Dunn wrote about it back on 20 April under the heading – 7 Fabulous Food Stocks – then a hell of a lot cheaper at $11.30.
Capilano Honey (CZZ)
One of Australia’s most successful food exporters is Capilano Honey Limited (CZZ), which exports to 33 countries. Capilano is the largest packer and marketer of honey in Australia, and is one of the world’s largest. The eponymous Capilano brand holds 50% of the Australian honey market and the company’s other brands take the company’s market share to 70%. In FY14, the domestic business accounted for 80% of sales, while exports were 20%.
Established in 1953, Capilano gets its honey from about 500 beekeepers, who collectively own about 40% of Capilano. Since listing on the ASX in July 2012, the stock has been a huge success on the stock market, turning its $2 listing price into $11.33.
As an Australian-owned processor, Capilano benefits from the clean, green perception of ‘brand Australia’ in export markets, as well as from domestic shoppers’ preference to buy Australian-made products. The company has launched new products to extend the uses of honey in the cooking, sports nutrition and health and wellness markets.
Capilano has shown excellent capital growth – CZZ has more than doubled in price in the last 12 months – and analysts’ consensus price targets see that rise extending to $12.30. But CZZ has not been much of an income stock, paying a 20-cent dividend in FY14, fully franked, for a historical yield of 1.8%. However, analysts’ consensus expects CZZ to lift that dividend in FY15 to 40 cents, lifting the prospective yield to 3.5%.
With Slater & Gordon, I would again sound a note of caution. The short sellers are very active – according to today’s ASIC figures, 17.2% of the shares are sold short, an extraordinary percentage. While they don’t always get it right, I wouldn’t bet against them.
Hope this helps.
