Wednesday, April 6, 2011

Share Price Alert: Charlies Group Ltd

Charlies Group Ltd [CHA.NZX]hasn't been a favourite of mine since listing around 6 years ago. I have been critical of its money losing history.

They have thus far churned through millions of dollars of shareholder cash growing the business but have achieved a major turnaround into profit over the last year or so with their latest profit result showing good revenue growth on last year and a better profit result to boot.

They have scored some big contracts over the last 6 months with their product going into 750 Coles stores late last year and today announcing some of their range will be sitting in Woolworths supermarket shelves in Australia.

What can I say. I am impressed by the turnaround and I was wrong. It pains me to say that.

The news in October 2010 sent the stock up over 40% in a few days, (see 1 year chart above) from 11c to 16c and rose to around 22c in February where it has been trading between 20-22c since then. This rise in share price has been characterized by low trading volumes, with the notable exception of a big trading spike in late November, early December 2010 when CHA shares moved from 14c to 19c.

Today's news has sent shares up 4c or over 18% to close at 26c today. This beats a previous all-time high of 25c reached in early 2007. (see 5 year chart below)

Keep in mind that this stock has risen from 8-9c levels from a year ago, so its rise to 26c at close of business yesterday is a spectacular rise of approx 180% in less than a year.

If the company is able to get the same sort of leverage in sales that they have from their Coles deal, that reflected so well in their latest result, then the Woolies deal will probably see them power ahead in terms of increased revenue and hopefully profit in the subsequent two reporting periods.

If you have been looking to buy you may want to consider getting in before eager investors like me snap up shares or hold back for some bad news or overall market weakness.

It looks like this company might be a good long term investment after all.

About Charlie’s - From Charlies PR

Charlie’s Group Limited is a New Zealand owned company listed on the New Zealand Stock Exchange and operating principally in the Australasian market. The company manufactures and markets a range of ‘not from concentrate’ fruit juices as well as smoothies and organic beverages. Principal brands are Charlie’s and Phoenix Organics. The business was established by friends Stefan Lepionka (CEO), Marc Ellis (director) and Simon Neal (distribution manager) in 1999 and floated on the New Zealand Stock Exchange in July 2005. Charlie’s operates in New Zealand and Australia and exports to territories in Asia, the Pacific, the Middle East and the Indian sub-continent.

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Charlies Group @ Share Investor

Share Investor Q & A: Charlies Group CEO Stefan Lepionka
Chart of the Day: Charlies Group Ltd
Charlies Group: A Triumph of Style over Substance
Charlies juicing through Shareholder cash

Discuss CHA @ Share Investor Forum
Download CHA Company Reports


Bird on a Wire: The Inside Story from a Straight Talking CEO

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