Cardno is a company I have been recommending for the past 3 years.
My last note on the company on the 10/12/2011 again recommending it a buy due to its high dividend and given that it was in the right sector to benefit from the early stages of the economic recovery.
At the time the price was $5.09, today the company is trading at $8.25 which is a 60% gain on this company.
Although this is still a quality company it is now trading well above our fair value making it time to take profits.
Given the quality of the company I would look to make sure that you re-weight this stock in your portfolio and hold the profit in cash for now.
At the current level, Cardno is still paying a 6% gross yield and its recent acquisition will continue to be earning accretive as such it continues to be a stock I will hold in my model portfolio.
Cardno is still well placed long-term with exposure to geotechnical engineering, environmental consulting and infrastructure as well as increasing exposure to the environmental, mining, oil and gas sector both domestically and internationally.
As the saying goes, “You will not go broke taking a profit”, and now is a good time to take a profit on Cardno.
For more information on Cardno (CDD) please contact us on 07 4771 4577.