The Codan Limited (ASX: CDA) share price has surged 33% up since the beginning of August, despite today's 3% share price fall.
In comparison, the S&P/ASX 300 Index (ASX: XKO) has gained 3.2% so far this month and is down 0.6% today.
Like most ASX companies, Codan's share price was hammered during the COVID-19 market rout earlier this year. Codan shares plummeted 53% from February 21 to March 23.
Following that low, Codan's share price has gained a whopping 177% to date. That rebound has put the company's shares up 51% year-to-date.
What does Codan do?
Codan Limited was founded in 1959 and has its headquarters in Adelaide, South Australia. The company manufactures and supplies communications equipment, metal detection, and mining technology.
Codan has offices in Canada, the United States, Ireland, the United Arab Emirates and South Africa. Its customers include humanitarian organisations, security and military groups, mining companies and governments. The company's global network of dealers enables its products to be sold in more than 150 countries.
Codan shares began trading on the ASX in 2003.
Why has the Codan share price leapt 33% in August?
Following the strong rebound from the March 23 low, Codan's share price stayed level during the first 2 weeks of August. In fact, the share price moved precisely 0% in the first 2 weeks of the month.
The Codan share price began to track higher the following week, and really took off on Thursday 20 August. That came after the company released its full year 2020 results, which saw shares close up more than 15% on the day.
Investors were clearly cheered by the company's 40% increase in its record statutory net profit after tax. Codan also achieved its highest full sales in its history, of $348 million, with new records in both its metal detection and communications branches. That enabled the company to maintain a net cash balance of $92.8 million.
The company noted that its gold detector sales remained strong, a reminder that in these days of revived gold fever, it's the companies selling picks and shovels (and gold detectors) that stand to make some of the biggest profits.
Though Codan's share price is down today, its business model should see continued strong demand for its product line.
