Here’s why the Codan Limited share price bounced today

Shares of Codan Limited (ASX: CDA) have rebounded more than 12% today, climbing to 67.5 cents after hitting a high of 73 cents earlier. That compares to a 0.3% decline for the ALL ORDINARIES (Index: ^AXAO) (ASX: XAO).

So What: Codan is a company that manufactures a range of products for global markets such as radio communications, mining technologies, and metal detection.

Today’s bounce came after the business announced its half-year results, including an 8% lift in net profit after tax (NPAT) to $6.1 million. The result was driven mostly by a 24% improvement in revenues from its metal detection business compared to the prior corresponding period (pcp).

However, revenues from communications products fell nearly 21% compared to the pcp to $29 million, and mining technology revenue was slightly lower at $2.3 million as well.

Now What: Although Codan’s shares are surging higher today, they’ve fallen sharply over the last six months. In fact, they’ve fallen almost 47% in that time and remain 83% below their peak in March 2013.

The company is forecasting another strong performance in the second half and expects a better underlying net profit compared to 2015’s result, which could see the share price recover some of its losses in the near term.

Our BEST stock idea for 2016 - FREE!

Our top analysts have recently selected their TOP stock idea for 2016, and with share prices falling, it could be the BEST time to buy! This relatively unknown technology share is growing rapidly and offers a fat, fully franked dividend! Best of all: their top stock idea for 2016 is yours FREE! Just click here, enter your email address and claim your free report - no payment or credit card required!

Motley Fool contributor Ryan Newman has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. You can follow Ryan on Twitter @ASXvalueinvest.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.