Codan designs and manufactures a range of electronic products and associated software for governments, businesses, aid and humanitarians, and customer markets.

“Despite growth in their communications division, the P/E over the past 12 months has fallen from 27x to 12x,” Michael said.

“Slow earnings growth makes Codan a possible value trap, but does the charting profile back this up?

“The share price has been in a downtrend for the past year.

“In the last several weeks, however, the CDA share price had levelled out and then started to edge higher.

“Volumes have also been healthy on the way up. However, the overall trend is still to the downside.

“If a low is now in place, then we need to see CDA push above $9 and hold in well, otherwise, the shares are still at risk of getting cheaper.

“The next support level is down near $6 and this may well be a better entry point for those investors who are looking to buy Codan,” Michael concluded.

Codan Limited (CDA)

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