Capilano all sweet says Morgans

By Trevor Hoey. Published at Aug 8, 2016, in Features

Shares in Capilano Honey (ASX: CZZ) slumped from the previous day’s close of $21.35 to $20.31 on Friday in response to the company’s announcement that it had recorded a net profit of $9.5 million for the 12 months to June 30, 2016.

While this represented year-on-year growth of 20.9% and was in line with management’s guidance and the expectations of analysts at Morgans CIMB, it would appear that shareholders were looking for an outperformance from a stock that took on market darling status after listing on the ASX in August 2013.

On the first day of trading, the company’s shares closed at $2.44 but by September 2015 they had increased nearly ten-fold to hit an all-time high of $23.72.

Prices are subject to fluctuation and investors should take a cautious approach to any investment decision in this stock and not base that decision solely on price movements.

Belinda Moore from Morgans CIMB was satisfied with the result as she held firm with fiscal 2017 forecasts while slightly upgrading estimates for 2018. Moore also increased her price target from $23.10 to $23.50, while maintaining an add recommendation, although these targets are no guarantee of coming to fruition.

The price target implies a PE multiple of 15.5 relative to Moore’s forecasts for fiscal 2018.

From an operational perspective the analysts sees the fortunes of Capilano’s new high margin ‘health honey’ and the Comvita joint-venture as key determinants of the company’s success in fiscal 2018.

Moore also is of the belief that the company should benefit from better seasonal conditions in fiscal 2018, but in the agricultural industry one can’t make such assumptions with any surety.

Capilano has a strong balance sheet, which was recently strengthened by the sale of the manuka beekeeping assets to the joint-venture for $9.2 million. This leaves the company well-positioned to execute on its strategy of transforming from a purchaser of honey and bee products from other enterprises to a vertically integrated group benefiting from strong supply chain management and the scope to penetrate emerging markets in medical and natural health.

Moore’s revised share price target implies a premium of 15.7% to Friday’s closing price, but there is no firm evidence to suggest that the company’s in line for a rerating. In fact, if Friday’s share price slide is indicative of broader market sentiment there could be more downside to come.

Where to invest $1,000 right now

When the experts at Next Investors have a stock pick, it may pay to listen.

The Next Investors have been investing in ASX small cap stocks for years, with their best small cap picks yielding returns of 1,200%, 1,120%, 900% and 678%.

They have just revealed their hand-picked, FY2021 stock portfolio of high conviction long-term investments.

Click the link below to see what they are currently investing in.


S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why is Australia’s leading small cap publication

Founded seven years ago, is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise. provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more. is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!