ASX:CGC

Stock Analysis Report

Executive Summary

Costa Group Holdings Limited produces, packs, and markets fruits and vegetables to food retailers and FMCG companies in Australia.

Snowflake

Reasonable growth potential and slightly overvalued.

Rewards

Trading at 81.8% below its fair value

Earnings are forecast to grow by 340.4% next year

Earnings have grown 41.1% per year over the past 5 years

Risk Analysis

Interest payments are not well covered by earnings

High level of non-cash earnings

Dividend of 3.21% is not well covered by earnings

Highly volatile share price over past 3 months

+ 1 more risk

Share Price & News

How has Costa Group Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CGC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-5.0%

CGC

1.3%

AU Food

0.4%

AU Market


1 Year Return

-57.0%

CGC

-10.0%

AU Food

14.8%

AU Market

Return vs Industry: CGC underperformed the Australian Food industry which returned -10% over the past year.

Return vs Market: CGC underperformed the Australian Market which returned 14.8% over the past year.


Shareholder returns

CGCIndustryMarket
7 Day-5.0%1.3%0.4%
30 Day-26.6%-2.1%0.4%
90 Day-25.8%3.1%4.6%
1 Year-54.3%-57.0%-6.7%-10.0%21.4%14.8%
3 Year-5.7%-14.8%6.6%-0.7%40.2%21.4%
5 Yearn/a33.3%21.6%54.5%19.5%

Price Volatility Vs. Market

How volatile is Costa Group Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Costa Group Holdings undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CGC (A$2.65) is trading below our estimate of fair value (A$14.57)

Significantly Below Fair Value: CGC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CGC is poor value based on its PE Ratio (93.7x) compared to the Food industry average (27.2x).

PE vs Market: CGC is poor value based on its PE Ratio (93.7x) compared to the Australian market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: CGC is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: CGC is overvalued based on its PB Ratio (1.8x) compared to the AU Food industry average (1.3x).


Next Steps

Future Growth

How is Costa Group Holdings forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

56.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CGC's forecast earnings growth (56.7% per year) is above the savings rate (2.3%).

Earnings vs Market: CGC's earnings (56.7% per year) are forecast to grow faster than the Australian market (9.8% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: CGC's revenue (10.1% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: CGC's revenue (10.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CGC's Return on Equity is forecast to be low in 3 years time (9.5%).


Next Steps

Past Performance

How has Costa Group Holdings performed over the past 5 years?

41.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CGC has a high level of non-cash earnings.

Growing Profit Margin: CGC's current net profit margins (0.9%) are lower than last year (11.5%).


Past Earnings Growth Analysis

Earnings Trend: CGC has become profitable over the past 5 years, growing earnings by 41.1% per year.

Accelerating Growth: CGC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CGC had negative earnings growth (-92.1%) over the past year, making it difficult to compare to the Food industry average (-28.6%).


Return on Equity

High ROE: CGC's Return on Equity (1.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Costa Group Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: CGC's short term assets (A$280.2M) exceeds its short term liabilities (A$222.8M)

Long Term Liabilities: CGC's short term assets (280.2M) do not cover its long term liabilities (612.5M)


Debt to Equity History and Analysis

Debt Level: CGC's debt to equity ratio (71.9%) is considered high

Reducing Debt: CGC's debt to equity ratio has reduced from 111.8% to 71.9% over the past 5 years.

Debt Coverage: CGC's debt is not well covered by operating cash flow (2%).

Interest Coverage: CGC's interest payments on its debt are not well covered by EBIT (1x coverage).


Balance Sheet

Inventory Level: CGC has a high level of physical assets or inventory.

Debt Coverage by Assets: CGC's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

What is Costa Group Holdings's current dividend yield, its reliability and sustainability?

3.21%

Current Dividend Yield


Dividend Yield vs Market

company3.2%marketbottom25%2.4%markettop25%5.6%industryaverage3.2%forecastin3Years2.8%

Current dividend yield vs market & industry

Notable Dividend: CGC's dividend (3.21%) is higher than the bottom 25% of dividend payers in the Australian market (2.35%).

High Dividend: CGC's dividend (3.21%) is low compared to the top 25% of dividend payers in the Australian market (5.62%).


Stability and Growth of Payments

Stable Dividend: CGC has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: CGC's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (176.8%), CGC's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CGC's dividends in 3 years are forecast to be covered by earnings (59% payout ratio).


Next Steps

Management

What is the CEO of Costa Group Holdings's salary, the management and board of directors tenure and is there insider trading?

7.1yrs

Average management tenure


CEO

Harry Debney 0

9.2yrs

Tenure

AU$1,806,536

Compensation

Mr. Harry George Debney, BAppSc (Hons) has been the Chief Executive Officer of Costa Group Holdings Limited since September 2010 and also its Managing Director since July 24, 2015. Mr. Debney is responsibl ...


CEO Compensation Analysis

Compensation vs Market: Harry's total compensation ($USD1.23M) is above average for companies of similar size in the Australian market ($USD717.43K).

Compensation vs Earnings: Harry's compensation has been consistent with company performance over the past year.


Management Age and Tenure

7.1yrs

Average Tenure

Experienced Management: CGC's management team is seasoned and experienced (7.1 years average tenure).


Board Age and Tenure

3.8yrs

Average Tenure

59.5yo

Average Age

Experienced Board: CGC's board of directors are considered experienced (3.8 years average tenure).


Insider Trading

Insider Buying: CGC insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyAU$16,499,96713 Nov 19
Lazard Asset Management LLC
EntityCompany
Shares6,597,600
Max PriceAU$3.70
SellAU$1,496,97113 Nov 19
Lazard Asset Management LLC
EntityCompany
Shares416,875
Max PriceAU$3.67
BuyAU$62,310,26904 Nov 19
Perpetual Limited
EntityCompany
Shares18,600,905
Max PriceAU$3.65
SellAU$10,719,15404 Nov 19
Perpetual Limited
EntityCompany
Shares3,004,092
Max PriceAU$4.32
BuyAU$69,831,60715 Oct 19
Schroder Investment Management Limited
EntityCompany
Shares18,170,188
Max PriceAU$3.84
BuyAU$12,906,84917 Sep 19
Lazard Asset Management LLC
EntityCompany
Shares3,590,718
Max PriceAU$3.62
BuyAU$76,669,02909 Sep 19
Lazard Asset Management LLC
EntityCompany
Shares17,803,347
Max PriceAU$5.19
SellAU$56,67105 Sep 19
Ec Poly & Co Pty Ltd
EntityCompany
Shares14,714
Max PriceAU$3.85
BuyAU$70,717,74805 Sep 19
ECP Asset Management Pty Ltd
EntityCompany
Shares16,056,871
Max PriceAU$4.57
BuyAU$119,60028 Aug 19
Neil Chatfield
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares40,000
Max PriceAU$2.99
BuyAU$29,90028 Aug 19
Peter Margin
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares10,000
Max PriceAU$2.99
SellAU$240,21319 Aug 19
Pendal Group Limited
EntityCompany
Shares66,541
Max PriceAU$3.61
BuyAU$1,165,13414 Aug 19
ASB Group Investments Ltd.
EntityCompany
Shares295,100
Max PriceAU$3.95
SellAU$19,801,01314 Aug 19
First Sentier Investors (Australia) IM Ltd
EntityCompany
Shares5,080,149
Max PriceAU$3.93
BuyAU$6,533,18214 Aug 19
First Sentier Investors (Australia) IM Ltd
EntityCompany
Shares1,600,026
Max PriceAU$4.20
SellAU$841,43914 Aug 19
Realindex Investments Pty Limited
EntityCompany
Shares218,919
Max PriceAU$3.84
BuyAU$695,84314 Aug 19
Realindex Investments Pty Limited
EntityCompany
Shares179,122
Max PriceAU$3.88
BuyAU$802,98709 Aug 19
Pendal Group Limited
EntityCompany
Shares218,203
Max PriceAU$3.68
SellAU$72,12809 Aug 19
Pendal Group Limited
EntityCompany
Shares18,686
Max PriceAU$3.86
SellAU$988,71726 Jul 19
Pendal Group Limited
EntityCompany
Shares308,431
Max PriceAU$4.14
SellAU$17,018,77214 Jun 19
Pendal Group Limited
EntityCompany
Shares3,354,930
Max PriceAU$5.20
BuyAU$16,387,55114 Jun 19
Pendal Group Limited
EntityCompany
Shares4,021,399
Max PriceAU$4.14
SellAU$50,541,00613 Jun 19
First Sentier Investors (Australia) IM Ltd
EntityCompany
Shares9,904,547
Max PriceAU$6.37
BuyAU$637,47113 Jun 19
ASB Group Investments Ltd.
EntityCompany
Shares157,700
Max PriceAU$4.04
SellAU$2,737,52213 Jun 19
Realindex Investments Pty Limited
EntityCompany
Shares467,550
Max PriceAU$5.86
BuyAU$4,502,24913 Jun 19
Realindex Investments Pty Limited
EntityCompany
Shares725,929
Max PriceAU$6.20
BuyAU$28,826,77813 Jun 19
First Sentier Investors (Australia) IM Ltd
EntityCompany
Shares5,620,300
Max PriceAU$6.46
BuyAU$55,07310 Jun 19
Elizabeth Wilson
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares15,000
Max PriceAU$3.67
BuyAU$76,69010 Jun 19
Timothy Goldsmith
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares20,000
Max PriceAU$3.83
BuyAU$25,07106 Jun 19
Janette Kendall
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares6,445
Max PriceAU$3.89
SellAU$43,958,60331 May 19
Bennelong Australian Equity Partners Pty Ltd
EntityCompany
Shares8,341,290
Max PriceAU$5.27
SellAU$903,99526 May 19
The Vanguard Group, Inc.
EntityCompany
Shares160,525
Max PriceAU$5.75
BuyAU$11,294,87226 May 19
The Vanguard Group, Inc.
EntityCompany
Shares1,933,514
Max PriceAU$5.86
SellAU$97,365,47917 May 19
Bennelong Australian Equity Partners Pty Ltd
EntityCompany
Shares12,760,875
Max PriceAU$7.63
BuyAU$19,84618 Mar 19
Janette Kendall
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares3,802
Max PriceAU$5.22
SellAU$1,101,49618 Mar 19
Harry Debney
EntityIndividual
Role
Chief Executive Officer
CEO, MD & Executive Director
Shares208,056
Max PriceAU$5.29
BuyAU$53,90014 Mar 19
Timothy Goldsmith
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares10,000
Max PriceAU$5.39
BuyAU$3,520,03917 Jan 19
Pendal Group Limited
EntityCompany
Shares585,632
Max PriceAU$6.02
SellAU$10,024,54717 Jan 19
Pendal Group Limited
EntityCompany
Shares1,727,116
Max PriceAU$5.86
BuyAU$25,04003 Dec 18
Janette Kendall
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares3,321
Max PriceAU$7.54

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Harry Debney

    CEO, MD & Executive Director

    • Tenure: 9.2yrs
    • Compensation: AU$1.81m
  • Linda Kow

    Chief Financial Officer

    • Tenure: 7.2yrs
    • Compensation: AU$883.69k
  • Tony Di Paolo

    Chief Procurement Officer

    • Tenure: 7yrs
  • David Thomas

    General Counsel & Company Secretary

    • Tenure: 7.3yrs
  • Sean Hallahan

    Chief Operating Officer

    • Tenure: 2.1yrs
    • Compensation: AU$851.82k
  • Carl Phillips

    General Manager of HR

    • Tenure: 5.4yrs

Board Members

  • Peter Margin (59yo)

    Independent Non-Executive Director

    • Tenure: 4.4yrs
    • Compensation: AU$67.71k
  • Neil Chatfield (65yo)

    Independent Chairman

    • Tenure: 4.4yrs
    • Compensation: AU$124.64k
  • Harry Debney

    CEO, MD & Executive Director

    • Tenure: 9.2yrs
    • Compensation: AU$1.81m
  • Elizabeth Wilson (60yo)

    Independent Non-Executive Director

    • Tenure: 0.6yrs
  • Janette Kendall

    Independent Non-Executive Director

    • Tenure: 3.1yrs
    • Compensation: AU$59.57k
  • Tim Goldsmith (56yo)

    Independent Non-Executive Director

    • Tenure: 1.2yrs
    • Compensation: AU$43.33k

Company Information

Costa Group Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Costa Group Holdings Limited
  • Ticker: CGC
  • Exchange: ASX
  • Founded: 1888
  • Industry: Agricultural Products
  • Sector: Food, Beverage & Tobacco
  • Market Cap: AU$849.669m
  • Shares outstanding: 320.63m
  • Website: https://www.costagroup.com.au

Number of Employees


Location

  • Costa Group Holdings Limited
  • 275 Robinsons Road
  • Unit 1
  • Ravenhall
  • Victoria
  • 3023
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CGCNASX (Australian Securities Exchange)NPV DFD 27/11/19(EX-RIGHTS)AUAUDNo data
CGCCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJul 2015
CGCASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJul 2015
CTTQ.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 2015
3CHDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 2015

Biography

Costa Group Holdings Limited produces, packs, and markets fruits and vegetables to food retailers and FMCG companies in Australia. The company operates through three segments: Produce, Costa Farms & Logist ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/14 10:43
End of Day Share Price2019/11/14 00:00
Earnings2019/06/30
Annual Earnings2018/12/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.