Capilano honey is a quality business but it looks expensive

Perpetual Equity Investment Company

Perpetual Asset Management (Australia)

Honey supply across Australia is currently low relative to historical levels, due to unfavourable weather conditions. Despite this Capilano Honey (ASX:CZZ) has been able to increase its market share by securing supply from local beekeepers and acquiring producers Chandlers and Kirksbees. ASX:CZZ also has the advantage of being able to supplement any domestic supply shortages by importing honey from a long time supplier in Argentina. ASX:CZZ’s objective is to increase export volumes and domestic supply curves. ASX:CZZ also has a strong balance sheet with minimal debt and sound management. ASX:CZZ’s share price has increased by more than 150% since the start of the calendar year and currently looks expensive. Further, domestic honey supply can fluctuate from year to year, which creates some uncertainty for the business. In light of this we have decided to sell out of the stock, but will look to reinvest in this quality business should the share price reduce in the near future. (VIEW LINK)


Perpetual Asset Management (Australia)

The Perpetual Equity Investment Company Limited is an ASX listed investment company offering investors access to a portfolio of predominantly high quality Australian and global listed securities, selected by Perpetual Investment Management Limited.

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