4 stocks with 1-year returns of more than 100% - CDA, MP1, MCP, PNV

  • May 31, 2020 AEST
  • Team Kalkine
4 stocks with 1-year returns of more than 100% - CDA, MP1, MCP, PNV

Summary

  • The last 12 months have been a roller coaster ride for Australia with the economy facing the double whammy of bushfires and the coronavirus pandemic.
  • The business operations of several companies were impacted. COVID-19, however, has created opportunities for industries such as biotech, IT, agriculture, and staple foods.
  • While CDA has continued to witness robust demand in its metal detectors due to increased gold mining activities, Megaport benefitted from rising demand in network services amid the lockdown.
  • Growing US sales and positive study results drove PNV’s performance while MCP profited from essential products and personal hygiene sales growth.

The last 365 days have been anything but predictable for Australia.  First, there was large-scale devastation due to the bushfires, which started in June 2019, and then the coronavirus outbreak that had a severe impact on the economy. Within three months, the Australian economy has experienced a loss of $50 billion.

Many businesses struggled during the period. However, there were companies whose sales rose during the recent months due to the unexpected opportunity that arose from the pandemic. Some of these companies seized the moment and focussed on extracting the maximum from the chance presented.

In this article, we would be looking at stocks whose value has more than developed in the last year and see what drove the share prices.

Codan Limited (ASX:CDA)

Codan Limited is engaged in the development of technology to solve the problems related to communications, safety, security, and productivity in the harshest environments on earth.

By the end of the day’s trade on 29 May 2020, CDA shares settled at $7.080, down 1.53% from the previous close. In the last 12 months, Codan shares have generated a return of 122.44%.

Trading Update:

On 23 April 2020, the company released its trading update where it highlighted that COVID-19 impacted all its businesses to a varying extent because of the industry lockdown.

The Codan Group witnessed robust sales through to March 2020 end. Profitability for the third quarter was consistent with the record run rate for 1H.

In March 2020, the company updated that the Malaysian government stopped all non-essential services which stretched till  April 2020 end. However, the company was able to reduce the impact on production. CDA’s contract manufacturers were able to obtain exclusions from the Malaysian government to operate, though at lowered quantities.

In April 2020, the company noted a fall in the sales across its entire business (~20%) because of its inability to meet demand, especially in the gold market.

Cash generation continued to be robust. After paying an interim dividend of $13.5 million, the company had $70 million net cash.

Megaport Limited (ASX:MP1)

Megaport Limited is a developer of elastic connectivity platforms that offers interconnectivity between networks.

By the end of the day’s trade on 29 May 2020, MP1 shares settled at $13.750, up 2.765% from the previous close. In the last 12 months, Megaport shares have generated a return of 128.41%.

Q3 FY2020 Highlights:

In Q3FY2020 (period ended 31 March 2020), the company’s monthly recurring revenue increased by 19% to $5.4 million as compared to the December 2019 quarter.

  • Revenue for the period increased by 10% to $15.19 million QoQ.
  • Total Installed Data Centres surged 4% to 329.
  • Total Enabled Data Centres was 601 by the end of the March quarter, up 9% QoQ.
  • Customers rose by 6% to 1,777.
  • Total Ports boosted by 11% to 5,375 QoQ.
  • Total Services went up 12% QoQ to 15,531, of which VXCs rose 14%.
  • Average Revenue per Port improved 8% QoQ.

The net cash used in Q3 FY2020, the net cash used in the operating activities and investing activities was $9.325 million and $6.422 million, respectively. Net cash from the financial activities was $4.047 million. By the end of Q3FY2020, the company had net cash and cash equivalent of $108.699 million.

Capital Raising:

On 7 April 2020, Megaport announced that it had raised $50 million through institutional placement and $22.5 million through the Share Purchase Plan on 5 May 2020. The proceeds through the capital raising would support the company in the expansion of Sales team and go-to-market activities to access a greater market share, product development, upgrade core network capability 400G and beyond 1T.  The company would also focus on expanding its footprints in the Megaport hosted infrastructure for greater Megaport Cloud Router adoption and other coming services.

McPherson's Limited (ASX:MCP)

McPherson's Limited is a leading supplier of health & beauty, consumer durable and household consumable products in Australasia.

By the end of the day’s trade on 29 May 2020, MCP shares settled at $2.730, up 0.368% from the previous close. In the last 12 months, McPherson's shares have generated a return of 114.96%.

Operations and Trading Update:

In the recent media release on 23 April 2020, McPherson's limited released its operations and trading update.

During the period, the company took initiatives to ensure the safety of the team. It invested in the IT system and system that supports seamless business continuity.

Majority of the company’s brands got benefitted as people were staying at home, and because of this, there were more baking, freezing & cleaning, and a greater focus on hygiene.

MCP did not experience any material adverse disruption to its supply chain with the delivery of products from China. Top 150 SKU supply chain operating at full potential with MCP teams in China, Hong Kong, Singapore guaranteeing the sustainability of supply.

The company’s aim on R&D enabled it to enter the sanitation and immunity industry. In April 2020, the company launched a hand sanitiser product by allying with Game On and the Chemist Warehouse licensed Ozguard brand and confirmed orders worth $9 million.

Presently, the company is confident about its initiatives and is on the way to meet its FY2020 guidance underlying PBT growth of ~10% over FY2019. This is based on the robust performance for nine months to March 2020 and the updated forecast for the Q4FY2020.

PolyNovo Limited (ASX:PNV)

PolyNovo Limited is engaged in the development of medical devices using the patented bioabsorbable polymer technology Novosorb®.

The shares of PolyNovo Limited has delivered a YTD return of 39.62%, and in last one year, the stocks have provided a return of 117.65%.

By the end of the day’s trade on Friday 29 May 2020, PNV shares settled at $2.75, up 6.178% from the previous close.

By the end of the day’s trade on 29 May 2020, PNV shares settled at $2.750, up 6.178% from the previous close. In the last 12 months, PolyNovo’s shares have generated a return of 129.17%.

NovoSorb® BTM Feasibility Study Results for US FDA:

On 16 March 2020, the company announced that it had submitted the Feasibility trial results to the US FDA. However, it was not able to release the result unless the FDA reviewed the results.

On 21 April 2020, the company provided an outline of the results for the CP-002 Feasibility Study. The study was done to evaluate the safety & efficiency of NovoSorb® Biodegradable Temporizing Matrix, which is used for the therapy of serious skin burn injuries.

The clinical trial was for 12 months, and it enrolled fifteen subjects with burns in the range of 10% to 70% of the entire body surface across the top four burn centres. These include:

  • University of California Davis.
  • University of Tennessee.
  • University of South Florida.
  • Wake Forest University.

Fourteen subjects within the age group of 21 to 67 years with average 45.1% TBSA deep dermal/full-thickness burns had BTM applied to cure thermal/contact burns. One subject was approved but could not qualify during screening and did not have BTM applied.

Seven subjects finished their 12-month regular evaluations & seven subjects were revoked.

March 2020 was a record sales month for the company. Let us look at the March 2020 quarter Update:

  • DACH region launch was strong, and BTM is now available in 8 hospitals. The company expects more accounts on board post the lockdown eases.
  • Few German and Swiss Surgeons did paediatric and adult patients with outstanding results.
  • UK team got expanded. Three salespeople and one marketer included.

NOTE: $ denotes Australian Dollar, unless stated otherwise

 


Disclaimer
The video has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above video is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site.

 

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