They say that time heals all wounds, but it has yet to heal the Costa Group Holdings Ltd (ASX: CGC) share price. This ASX 200 stock has had a truly awful time of it over the past few years.
Back in June 2018, five years ago, this agricultural company and produce grower was asking over $7.80 a share. Today, it languishes at $2.76 a share as we speak. That’s down more than 60% from those glorious highs we saw back in 2018. Take a look for yourself below:
So it’s fair to say that investors have been suffering for a long time. In addition to those five-year losses, the Costa share price is also down 6.76% over the past 12 months. Saying that, it is also up a slight 0.73% year to date in 2023 so far.
Costa has been battling a variety of issues over the past few years, including severe weather, inflation and access to export markets. These probably explain why its share price has been so entrenched on struggle street.
Back in February, investors were disappointed with the company’s full-year earnings for FY2022. Although these included an 11.2% rise in revenue, Costa reported a 10% drop in statutory net profit after tax (NPAT) to $47 million.
But after such a tumultuous five years, could Costa shares finally be poised for a comeback?
Is this ASX 200 stock ready to rebound?
Well, that’s certainly the view of one ASX expert. As reported in the Australian Financial Review (AFR) last week, Alan Kwan has recently given his views on Costa shares. Kwan is a portfolio manager at Australian Eagle Asset Management.
Kwan was asked which stock in the Australian Eagle Long Short Fund was the most undervalued by the markets. He named the Costa share price.
According to Kwan, Costa has “decent upside”. He noted that the company “has doubled its area under plantation since its initial public offering (IPO) and yet is still trading at close to its IPO price in 2015”.
Kwan also points to Costa’s international markets as providing a path to higher earnings (particularly from the blueberry markets in China and Morocco). He anticipates that weather will “be less of an issue in Australia in the near term as it recovers from weather impacted citrus earnings in the NSW Riverina area”.
So no doubt Costa shareholders will be delighted with this level of conviction from one ASX fund manager. But we’ll have to wait and see what happens with Costa shares over the coming 12 months and beyond.
