CAV - Cavalier Corp (Carpets)

[777]

I don't deny there is a long way to go, but I bought in at 175 and sold at 212 and 205 for an 18.7% gain in 1 month. I figure CAV will rise another 10% this month but I want more than that. Call me insane. You'll certainly do well, CAV is a very cyclical company :-)

Have you allowed for tax on your trading?

[mknz]

@777 No, this is my pre-tax return. I would have had 21% gain but it started to drop halfway through my exit.
@Montana Keep in mind the time-frame. Instead of thinking of total return I think of it as return / unit of time. I estimate that cavalier will get up to 230 over the next 30 days, and that is a 10.8% gain from $2.05 where it is now. 10.8%/30days. If you have a trade that you are confident will give you more than 10.8% over the next month you should switch to that.
@macduffy Unfortunately I can't disclose that information yet... but if you search for me in a week I'll likely be posting from my next trade's forum:-)

[Minerbarejet]

For a complete and utter fluke how does 10% in three days sound. In at 1.83 last week and out at 2.04. Try that with your favourite bank. Now for the crunchy bit - original investment returned and I now have a bunch of Cavalier shares for nothing just in case they carry on. Maybe I'll make up for those woebegone RNS after all. Next - NPX. Hmmmmmm

[macduffy]

@777 No, this is my pre-tax return. I would have had 21% gain but it started to drop halfway through my exit.
@Montana Keep in mind the time-frame. Instead of thinking of total return I think of it as return / unit of time. I estimate that cavalier will get up to 230 over the next 30 days, and that is a 10.8% gain from $2.05 where it is now. 10.8%/30days. If you have a trade that you are confident will give you more than 10.8% over the next month you should switch to that.
@macduffy Unfortunately I can't disclose that information yet... but if you search for me in a week I'll likely be posting from my next trade's forum:-)

Fair enough.

Wouldn't do to have the rest of us climbing all over your next trade!

[montana]

Well the WSI acquisition isn't looking too promising anymore

http://www.nzfarmersweekly.co.nz/article/9552.html

[mknz]

Here are a few worrisome things about the market that Cavalier operates in:

Cavalier gets 54% of it's business from Australia and Oz is heading into a recession. Part of the reason CAV did so badly this year was the recession in Europe, but now that "recession" is turning into a full scale implosion with France, the second biggest economy in the Euro showing a PMI of 45. The Euro contamination is still spreading and getting worse and not better.

Australia's economy is dependent on China's economy and China is in a full scale crash right now. China's demand for Australia's things is going to continue to drop off the bottom of the longterm charts. With more than half of Cavaliers business coming from Australia I have serious doubts that Cavalier will turn much of a profit. Maybe 1-2million, but certainly not 8 -10 million.

The rest of Cavalier's business comes from New Zealand, and NZ's money comes from protein exports to Australia and China. As China's crash begins to negatively effect the new middle classes incomes it is possible that they could return to buying rice instead of protein. That would be a severe blow to New Zealand's economy.

Finally, the Rhino on the carpet ads have been extremely powerful in shaping public opinion and it is quite likely that Cavalier will not have nearly as much marketshare in the new Christchurch as it did before the earthquake, and Cavalier's new commercials are not effective in combating this durability argument.

In general, all this information makes it seem less likely that Cavalier's restructuring is going to have as positive an effect as management hopes, and for me personally this is preventing me from putting my money back into Cavalier.

[Snoopy]

Here are a few worrisome things about the market that Cavalier operates in:

Cavalier gets 54% of it's business from Australia and Oz is heading into a recession.

Hasn't the Oz building market been in recession for some time already?

Part of the reason CAV did so badly this year was the recession in Europe, but now that "recession" is turning into a full scale implosion with France, the second biggest economy in the Euro showing a PMI of 45. The Euro contamination is still spreading and getting worse and not better.

What is the percentage of Cavilier's sales go into Europe though? Is it even 1% of sales?

Australia's economy is dependent on China's economy and China is in a full scale crash right now. China's demand for Australia's things is going to continue to drop off the bottom of the longterm charts. With more than half of Cavaliers business coming from Australia I have serious doubts that Cavalier will turn much of a profit. Maybe 1-2million, but certainly not 8 -10 million.

mknz, those capital intensive carpet factories need a certain volume to cover their costs. Could it be that the rebuild of Christchurch might provide this, irrespective of what happens in Australia? The first consent for a new office building in the Christchurch CBD was only granted last week.

Also I would be interested to know what percentage of Cavalier's sales go into refurbishing buildings (more likely in a recession to attract tenants to fill existing office space) as opposed to new builds.

The rest of Cavalier's business comes from New Zealand, and NZ's money comes from protein exports to Australia and China. As China's crash begins to negatively effect the new middle classes incomes it is possible that they could return to buying rice instead of protein. That would be a severe blow to New Zealand's economy.

Let those poor Chinese eat (rice) cake!

Finally, the Rhino on the carpet ads have been extremely powerful in shaping public opinion and it is quite likely that Cavalier will not have nearly as much marketshare in the new Christchurch as it did before the earthquake, and Cavalier's new commercials are not effective in combating this durability argument.

I never thought it was likely that the removal of sow crates would mean a large uptake in Cavalier carpeted 'porker hotels' to appease the animal rights lobby anyway. No matter how well the Cavalier Rhino proved the concept!

In general, all this information makes it seem less likely that Cavalier's restructuring is going to have as positive an effect as management hopes, and for me personally this is preventing me from putting my money back into Cavalier.

I am not saying you are wrong. Just putting a different perspective on events.

SNOOPY

[Sideshow Bob]

Don't know anything about the company, but haven't wool prices come back down again??

[Balance]

Here are a few worrisome things about the market that Cavalier operates in:

Cavalier gets 54% of it's business from Australia and Oz is heading into a recession. Part of the reason CAV did so badly this year was the recession in Europe, but now that "recession" is turning into a full scale implosion with France, the second biggest economy in the Euro showing a PMI of 45. The Euro contamination is still spreading and getting worse and not better.

Australia's economy is dependent on China's economy and China is in a full scale crash right now. China's demand for Australia's things is going to continue to drop off the bottom of the longterm charts. With more than half of Cavaliers business coming from Australia I have serious doubts that Cavalier will turn much of a profit. Maybe 1-2million, but certainly not 8 -10 million.

The rest of Cavalier's business comes from New Zealand, and NZ's money comes from protein exports to Australia and China. As China's crash begins to negatively effect the new middle classes incomes it is possible that they could return to buying rice instead of protein. That would be a severe blow to New Zealand's economy.

Finally, the Rhino on the carpet ads have been extremely powerful in shaping public opinion and it is quite likely that Cavalier will not have nearly as much marketshare in the new Christchurch as it did before the earthquake, and Cavalier's new commercials are not effective in combating this durability argument.

In general, all this information makes it seem less likely that Cavalier's restructuring is going to have as positive an effect as management hopes, and for me personally this is preventing me from putting my money back into Cavalier.

Big yawn! Talk about losing perspective!

The Western economists, commentators and media have been predicting the crash of China now for over 15 years.

Why have they been wrong and will continue to be wrong? Because the Chinese do not borrow like Westerners and they certainly know how to work hard and save for a rainy day.

That's where the Greeks, Spanish, Irish, Icelanders, French, Italians, North Americans, Australians and above all, New Zealanders lost their way a long time ago.

BTW, do you know that the price of coal today is still 50% higher than where it was in 2008 and 300% more than 10 years ago? Shhhh ... we do not want to stop the scare-mongering.

[Lizard]

From the agm speech:

Given the slow start for quarter one and little or no improvement in Australian market activity, our previous earnings indication of $10 to $12 million is looking to be a bit of a stretch. Our earnings are difficult to predict in this uncertain environment because they are so sensitive to carpet sales volumes. The best guidance we can offer at this stage is for normalised earnings between $6 and $10 million tax-paid.

So, once again, the mirage of improvement recedes into the distance and the share price heads back towards the lows (currently $1.55). I do not see this as surprising - I have been more surprised at the recurring buoyancy. However, I think we are close to seeing the lows for this cycle within the next 6-9 months, so hoping it will go low enough this time to finally offer an entry I'm comfortable with.

Funny, a few years ago, there was an AGM where the Chair or MD commented that the "stars aligned" in the previous year. This AGM, there is reference to "annus horribilis". Pick your entry.