CAV - Cavalier Corp (Carpets)

[percy]

The old saying of Arthur Lim has saved me loosing money,and helped me make a few dollars.
"Buy into anything China wants,sell out of anything China makes."
If demand for wool carpets was there,we would not be having this conversation.
I am told I do not understand the carpet business,however any business that lets their unsold inventory grow as CAV has done, is asking for trouble.And CAV have trouble.Millions of dollars worth of carpet trouble.It uses up resources being made.Wool and materials have to be paid for.Staff have to be paid to make the carpet.Then the carpet has to be stored.Extra storage cost money.Then extra insurance costs.Then extra handling costs.Then the bank wants interest on the borrowed money.Then management time is spent running around in circles.The business has never been right sized.
I would be careful stating your turnarounds are going to plan,as other than QBE and NWF,the others remain in steady downtrends.Two out of six going to plan means two thirds aren't!

[winner69]

What's Arthur Lim up to these days Percy?

Don't hear too much of him

[Joshuatree]

Some friends have sworn never to buy wool carpet again after beetles damaged theirs and forced them to replace the lot with synthetic.

[percy]

What's Arthur Lim up to these days Percy?

Don't hear too much of him

I don't know.
Googled him and came up with Align Capital.

[Gunny]

Thanks Percy I too hold TNR. Looking forward to the next result.

Was wondering why people would consider CAV at this rate when TNR seems such a better buy for the reasons you have laid out so well.

Gunny

[percy]

Thanks Percy I too hold TNR. Looking forward to the next result.

Was wondering why people would consider CAV at this rate when TNR seems such a better buy for the reasons you have laid out so well.

Gunny

Well here is some fun for you.
1] CAV is a real business producing a real product,employing real NZders.
2] CAV have a valuable "brand" respected by retailers and customers alike.
3] There is still a market for woollen carpets.
4] The huge stockpile of carpet is an asset.
5]Once the business has been right-sized,debt brought under control,the value of the assets [ie manufacturing plant] will again be worth the current book value.
6] The business under wonderful new management,making real profits ,will make the market wake up to the "true value" of CAV.This rerating will see long term CAV shareholders being well rewarded,and the doomsayers proved wrong.
7] Then just when you think it can not get better,Mowhawk make a fantastic takeover offer.

[winner69]

Well here is some fun for you.
1] CAV is a real business producing a real product,employing real NZders.
2] CAV have a valuable "brand" respected by retailers and customers alike.
3] There is still a market for woollen carpets.
4] The huge stockpile of carpet is an asset.
5]Once the business has been right-sized,debt brought under control,the value of the assets [ie manufacturing plant] will again be worth the current book value.
6] The business under wonderful new management,making real profits ,will make the market wake up to the "true value" of CAV.This rerating will see long term CAV shareholders being well rewarded,and the doomsayers proved wrong.
7] Then just when you think it can not get better,Mowhawk make a fantastic takeover offer.

Bang on Percy except 7) will probably come after 4) ....leaving long term punters disappointed but the likes of PSE reasonably happy.

And we will never know how 6) turns out

But then the likes of Roger says somebody will buy what's left from the receivers

[macduffy]

Very good, percy - and that's the worst-case scenario!

[percy]

Only CAV is not going to plan with its unsold inventory and departing managwment. I don't know anything useful about trends I am just talking about the businesses themselves.
They are all troubled and I believe undervalued on the 3-5 year view, don't judge me on 6 months but longer term I have been doing very well.

I hope you are right,and I look forward to you telling me. in three years or so time,how well you have done,and how foolish I was to miss the wonderful buying opportunities these companies gave astute investors.!!!

[winner69]

Share price going up like a rockets

Mohawk finally making a move?

You getting rich now PSE