NZSE:CMOSpecialty Retail
Colonial Motor (NZSE:CMO) Stock Looks Cheap, But Earnings Quality Remains Fragile
Colonial Motor stock closed at NZ$7.10 on Friday, slightly higher over the past week, as traders tried to make sense of an earnings story that looks very different depending on the time frame. The headline is simple. Trailing earnings have increased over the last year and the trailing P/E sits at 10.5x, well below the Oceanic specialty retail average. However, over a longer period, earnings have declined and net profit margins remain thin at 2.1%.
Today’s price action suggests a cautious...