Why the Codan (ASX:CDA) share price is jumping 7% to a record high

The Codan Limited (ASX:CDA) share price is jumping higher on Tuesday and has just hit a record high. Here’s why it is on fire today…
The post Why the Codan (ASX:CDA) share price is jumping 7% to a record high appeared first on The Motley Fool Australia. –

A happy woman raises her face in celebration, indicating positive share price movement on the ASX

The Codan Limited (ASX: CDA) share price has started the week in sensational form.

In afternoon trade, the technology company’s shares are up 7.5% to a record high of $17.06.

This latest gain means the Codan share price is now up over 51% since the start of the year.

Why is the Codan share price at a record high?

Investors have been fighting to get hold of the company’s shares this year for a number of reasons.

This includes its strong performance in the first half of FY 2021, its inclusion in the S&P/ASX 200 Index (ASX: XJO), the announcement of two key acquisitions, and bullish brokers.

In respect to acquisitions, in February Codan announced a deal to acquire Domo Tactical Communications for US$88 million.

Domo Tactical Communications’ MIMO Mesh products provide wireless transmission of video and other data applications to predominantly first world customers. This includes Military and Special Forces, Intelligence Agencies, Border Control, First Responders, and Broadcasters.

Codan followed this up with the acquisition of Zetron, Inc. for US$45 million last week.

Zetron is a leading US based company providing mission critical communications and interoperability solutions for public safety, transportation, utilities, healthcare and natural resources customers.

Management is forecasting both acquisitions to be accretive to earnings per share.

Why is it jumping today?

Today’s rise in the Codan share price is being driven by one of the aforementioned bullish brokers.

As I mentioned here earlier today, this morning Macquarie Group Ltd (ASX: MQG) spoke positively about the company. Its analysts have retained their outperform rating and lifted their price target on the company’s shares to $17.00.

Macquarie is happy with the acquisition of Zetron and feels it gives Codan exposure to a complementary and attractive market.

In addition to this, the broker notes that Codan has recently launched a key new gold detector. Based on previous launches, which have led to a strong upgrade cycle, Macquarie appears to believe this could give its sales a big boost.

However, with the Codan share price now surpassing Macquarie’s price target, the upside from here could be limited in the near term.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Codan (ASX:CDA) share price is jumping 7% to a record high appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!