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  1. #11
    Speedy Az winner69's Avatar
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    Quote Originally Posted by Phaedrus View Post
    The market giveth - and the market taketh away....



    An illustration of why exit strategies are important.
    Thats an amazing chart eh Phaedrus ... something for fundamentalists to envy

    In round numbers lets say CAV has gone from 170 to 550 (trebled) and then gone all the way back to 170 ... so shareholders return in those 8 years has been the dividend.

    Why do fundamentalists envy such a graph .... because it shows the sentiment of the market.

    In 2000 (start of P's chart) CAV earnings were about 20 cents a share / it was on a PE of 9 and trading at 1.5 times book value (all pretty respectable for a manufacturing company)

    At its peak of 550 odd in 2003 CAV earnings were 29 cents a share (only 50% more than a few years before) / its PE had expended out to 16 and it was trading at 5 times book value (bit rich eh)

    Now today earnings are what they were in 2000 ... about 20 cents a share / its PE is about 9 and it is trading at about 1.4 times book value

    So 'fundamentally' nothing surprising about todays price is there. CAV shareprice has not been dragged down by the malaise of the market .... it is 'fundamentally priced' about right

    Just highlights what happens during boom times and when on fundamentals things get 'overvalued'. CAV earnings over the last 10 years have generally been in the 20 to 30 cents per share (reached 32 cents in 2004). Cav has paid out a fair chunk of earnings in dividends so its equity has only increased from $60M TO $80M in the last 8 years or so. CAV earnings have consistently covered its cost of capital but not excessively or to the extent it deserves to trade much above 1.5 times book value. Pretty solid performing company ... what you would expect from a good old fashioned manufacturing company

    so the market was exhuberant in 2003 and 2004 ..... CAV multiples expanded and the share price shoot up to 550 ... on fundamentals overvalued ..... and probably a genuine value investor (if there is such a beast) would have bailed .... ironic ..... about the same time as the likes of phaedrus would have bailed as well


    What happens in secular bear and bull markets it is the multiples that change .... when stocks like CAV reach truly overvalued levels and when 100 or 200 day moving averages signal it take the winfalls and run ... think of it as present from god.

    Using Phaedrus's phrase 'the market giveth ... but don't let the market taketh away'

    Interesting stuff

  2. #12
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    Back in 1996 I bought 10,000 Cavalier for $15,750. Since then I have had $24,887 returned as dividend and capital repayment($3,500) and the shares I have now, 8750 are worth $15,020. This approx is a 7.4% net return. On top of that is what ever the $24,887 has earned over those 13 years.

    I have always thought it a well run company which is managed by people who don't have big egos to support. Not too many of those on the NZX these days.

  3. #13
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    I'm with 777 on this one. I too bought in 1996 and with thrice-yearly dividends, a share split and a buy-back, my CAVs have long since paid for themselves. Of course the sp has fallen from the giddy heights but it looks as if the market is finally wakingup to CAV's positives. These include the very astute purchases of Norman Ellison carpets and Ontera carpet tiles, and rationalisation in the wool scour sector. CAV's sp rose 7% last week, has been up every day this week, jumping 26c today alone. At 180cps it is roughly 60% higher than its 12-month low.

  4. #14
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    while the sp hasn't done much since your post, Lawso, it has consolidated at the higher level to the extent the chart is suddenly looking promising:
    30 and 90-day moving average crossover, downtrend broken.
    scamper holds some, and will be watching carefully to buy a few more.
    really like the 3x annual div, and 10% is quite good.
    do you think they'll lower the div next time round?
    cheers, scamper.

  5. #15
    Speedy Az winner69's Avatar
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    From all accounts all on track to deliver a pretty repsectable result in tough times for comapnies like these

    Hopefully debt will have come down .... they had enough stock when last reporting to last many months


    Shareprice back close to 200 .... wouldn;t surprise to see closer to 250 in a month or so post positive comments in the announcement

  6. #16
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    Quote Originally Posted by winner69 View Post
    From all accounts all on track to deliver a pretty repsectable result in tough times for comapnies like these

    Hopefully debt will have come down .... they had enough stock when last reporting to last many months


    Shareprice back close to 200 .... wouldn;t surprise to see closer to 250 in a month or so post positive comments in the announcement
    What accounts are these, winner ?

    Have I missed something recently, other than CAV's SP trend is looking positive and at a six month high?

    Cheers

  7. #17
    Speedy Az winner69's Avatar
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    Quote Originally Posted by macduffy View Post
    What accounts are these, winner ?

    Have I missed something recently, other than CAV's SP trend is looking positive and at a six month high?

    Cheers

    Just word on the street as they say ....

    ....volumes stuff all but some keen buyers this week

  8. #18
    Speedy Az winner69's Avatar
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    With the company renowned for not saying much publicly one will have to wait until late August

  9. #19
    Speedy Az winner69's Avatar
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    Quote Originally Posted by winner69 View Post
    From all accounts all on track to deliver a pretty repsectable result in tough times for comapnies like these

    Hopefully debt will have come down .... they had enough stock when last reporting to last many months


    Shareprice back close to 200 .... wouldn;t surprise to see closer to 250 in a month or so post positive comments in the announcement
    And so it turned out to be ..... that post was a month ago and the shareprice was about 200 and now 260 ..... 25% increase leading up to the announcement so obviously punters had caught on somehow

    Sound pretty positive as well so maybe quite a lot more upside in the shareprice

  10. #20
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    Good call, winner.

    CAV is one of my longest held NZ stocks and has been a pretty good performer and a great income stock.
    Result was close to forecast, they're doing well in a tough market.


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