CAV - Cavalier Corp (Carpets)

[muss1]

Assuming they hit the bottom end of the range the SP is about fair with a pe of 16.. Maybe everyone knew already.

I will be a bit disappointed if they don't hit closer to the upper end of the range. However, the lower end will still hit my growth target based on where I bought it. Time will tell whether they gain enough traction. I think they will with the range of products and the industry heating up both here and aus

[winner69]

Assuming they hit the bottom end of the range the SP is about fair with a pe of 16.. Maybe everyone knew already.

PE of 16 - come on

I would contend people expecting more ..... even more than 10 mill which would give it a PE of 13

[muss1]

PE of 16 - come on

I would contend people expecting more ..... even more than 10 mill which would give it a PE of 13

I agree.. There's definitely room to move on the pe front. 8mil is 20% EPS growth so maybe a pe of 20? $2.40.. That sounds a bit better

[blackcap]

May I just add some anecdotal 2 cents worth. was speaking to a guy last night at badminton who owns 2 Carpet 1 franchises. I asked him a bit about carpet but Cavalier was definitely not high on his list. Too many problems with fading (wools) and when pressed he said he didnt care much for them. So somewhere along the line CAV have gone wrong. Ok they probably do tend more to the upmarket range but still this is the second person I have spoken to in the industry that does not like CAV

[winner69]

I agree.. There's definitely room to move on the pe front. 8mil is 20% EPS growth so maybe a pe of 20? $2.40.. That sounds a bit better

Over the last 10 years CAV had a PE around 14 (in the good times for the market) and even then they disappointed .... rest of the time PE of 10 or under

10 -12 seems fair enough to me .... allowing for them coming from the depths of despair

[winner69]

May I just add some anecdotal 2 cents worth. was speaking to a guy last night at badminton who owns 2 Carpet 1 franchises. I asked him a bit about carpet but Cavalier was definitely not high on his list. Too many problems with fading (wools) and when pressed he said he didnt care much for them. So somewhere along the line CAV have gone wrong. Ok they probably do tend more to the upmarket range but still this is the second person I have spoken to in the industry that does not like CAV

Though nobody is listening that's how I see it as well .....times have changed in the industry and CAV have not changed with it. Consumer choices/demand are different / routes to market through retailers and distributors now have different rules / in the commercial specification market CAV try hard but Geoffrey Hirst doing better (in NZ and particularly in Australia)

Top line growth hard to come by .... margins will never be what they were .... so how more many years can CAV save their way to making any reasonable profits (even at $10m NPAT not covering their cost of capital, ie value destroying) ... almost squeezed what they can out of the lemon.

Without radical transformation I would think $10m - $15m is the uppermost range of their profitability .... and as such CAV will only become at best a steady earner with a with a steady divie ..... and that's there lot ... so valuation is really how much are you prepared to pay for a 10 to 13 cent divie (in good times)

Just my rave ... consistent with what I have said over many years .... and even though generally been right what the hell do I know anyway

[muss1]

Considering what you've just said winner - assuming you bought at a reasonable price available a few months ago - wouldn't you be happy to hold CAV for a year or so? Applying the numbers you outlined means decent SP growth over the next year or two is pretty likely. Even if all the ever manage to achieve again is mediocrity

[winner69]

Considering what you've just said winner - assuming you bought at a reasonable price available a few months ago - wouldn't you be happy to hold CAV for a year or so? Applying the numbers you outlined means decent SP growth over the next year or two is pretty likely. Even if all the ever manage to achieve again is mediocrity

For a hold over a year or so i would look to stocks I only look to stocks that have a chance (in my humble view) of doubling .....and I don't see CAV as meeting this criteria.

And you are the one who uses the word mediocrity ...I think I said solid at best. They have good products that people want - the market is changing and now more competitive - they'll still make dosh .....but enough to get a shareprice to 3 to 4 bucks ....not really

And not really enough liquidity even to consider trading prices

[winner69]

Here is some good stuff CAV are doing
http://www.cavbrem.co.nz/whats-new/n...oom-opens.aspx

[winner69]

they held out for a couple of days but finally a couple of sellers relented .... hope they were locking in profits and not crystalising losses.

Might need to lower the 161 in case it gets hit if a few more sellers want out