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  • wbplc1998 wbplc1998 Oct 12, 2004 1:48 AM Flag

    What If

    "What if the dollar continues to fall against the euro? Just a what-if..."

    astral... FWIW I reckon the USD/Fx overvaluation problem lies with China, Korea, Mexico etc. It's the emerging market countries where there seems to be a significant US trade imbalance. If the USD corrects say 20% then this is where it will be felt most.

    I don't think there is much of a trade imbalance with the EURO region.

    Further, a EURO in the 1.20 - 1.30 range is pretty much where it has been for the past decade, long before the USD had large trade imbalance issues.

    Check EURO 'purchasing power parity' (ppp) at the OECD website or...

    If anything the EURO is over 'ppp' at 1.25 and 1.13 is a more neutral figure.

    On a micro level the evidence is obvious in the soft sales figures of NTZ high end European manufactured seats. The US consumer is so price sensitive because he is already so leveraged.

    No one has mentioned this yet, but its glaring to me... NTZ is opening their branded stores everywhere in the world except the USA. They especially concentrate their store opening efforts on strong robust growth economies.

    NTZ recognise they have the capacity to sell quality medium/high end to the other 70% of the world thats not the USA (i.e. where the consumer is not as leveraged).

    This basket of currency sales is one of the reasons NTZ is a safer bet than most.

    Cheers WBplc

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    • "FWIW I reckon the USD/Fx overvaluation problem lies with China, Korea, Mexico etc."

      I reckon similarly. The USD undervaluation is mostly with Asia, ex-Japan, in my opinion. Don't know about Mexico, not informed enough.

      The Euro is as overvalued as the USD, in my opinion. The CHF is even more overvalued and the GBP less so than the Euro.

      Agree that with NTZ selling and producing on multiple continents, it's regular operations provide significant natural hedges.

      • 1 Reply to Sapper588
      • I agree. The CHF is seriously overpriced.

        NTZ is quite a good business being totally overlooked by the market at present.

        Except by Tweedy Browne who own 9.2% and their only crime has been to consistently beat the market over decades!!!

        People will always sit down and the trend is to do it more.

        It's rare to find...

        A simple industry leader,

        With major insider ownership/alignment

        Debt free ($2.20 cash p/s in the bank)

        With many natural currency hedges,

        Growing quicker than GDP,

        Earning 12%+ ROE averaged

        Plenty of cash generation.

        Paying 20% of eps as a regular dividend and occasional special divs @ $1.00

        New plant etc

        Price < Book value

        P/E < 8 on enterprise capital

        Textbook Graham & Buffett... Go figure!!!

        Given patience this will work out quite well.

        Cheers WBplc

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