It has been a number of quarters since i posted here last. If anyone cares (which I cannot imagine), when the stock was at about $6.00 and at about $4.00 and perhaps a little lower, I was saying that the stock would be under $2.00 in the future. Of course, I was called an idiot and a short seller who wanted to use Yahoo to create a self-fulfilling prophency of doom (as if any anonymous poster here could make that happen). Anyhow, what I suggested then remains what I am suggesting now: this stock is going further south. there is no need to be in it at all. If you like the company, its management, its markets, etc. (all rational possibilities), keep an eye on the stock and buy it AFTER it starts to come back up -- because it will go below $1.00 and then eventually return to above $4.00 or $6.00. The question is: why keep money here in the meantime?
Just look at every trend: the market, the company's performance, their own view of the outlook, the work in the pipeline, the projects that will fuel revenues two or three years out. ALL trends are down. There is no reason to believe the trends will stop and flatten out or reverse themnselves. The bottom will be known in hindsight only. There is no reason to believe we are at the bottom when all the trends are still going south. I believe the trends will continue to go south for the next 18-24 months, maybe longer. Believe I am wrong? If you bought your house in the Greater Washington region (the best and most stable market in the nation IMHO) right before the last down cycle started, you would have waited SEVEN YEARS for your house to regain its value. So, 18-24 months may be optimistic.
So ... I believe now that this stock is going to be selling for less than $1.00. I believe the company can avoid bankruptcy. But they will have to cut expenses dramatically, as well as projects. And that, in turn, will lead to lower revenues, espececially as they work through their current projects. And the result of that will be less and less interest among investors, translating into less demand for the stock to support the sales that will occur. Less demand + ongoing sales = lower share price. Of course, the lower share price will be exaccerbated when and if the shares get delisted because of its low price (or when management tries a non-productive reverse split to keep the stock from being delisted). As we get closer to December 31, some people (even fans) will decide to get out and take their tax losses ... and that will translate into sales pressure, which, in the face of no buying interest, will exacerbate the decline in enterprise value even more.
Just my two cents from the for-what-it's-worth department. Now, all you CHCI bulls can attack me the same way you did when I said the stock was going under $2.00. A great opportunity sometime in the future; a certain loser in the near- to mid-term.
I'll post again when the stock dips to under $1.00
**I was saying that the stock would be under $2.00 in the future.**
Can you provide the link to the post where you predicted a stock price of under $2? As usual, you won't because you can't.
However now you have gone on record to claim that it will go under $1, so we will watch and see.
JUST FOR YOU, FISHER BIZ --
You said that "as usual" i would not substantiatie my predictions because you claim I can't (as if i post so often here that my posts and re-posts have established a pattern where I have shown "usual" behavior -- i haven;t posted here that frequently to evoidence anything "usual" or unusual -- but, moving right along ...). Check my post of just a little more than one year ago, almost to the day (9 august 06): http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_C/threadview?m=tm&bn=24776&tid=2829&mid=2833&tof=20&frt=2
This is that post (with typos cleared up):
[in response to why i was posting about chci]: "maybe because I was the type of kid who couldn't keep my eyes off of freaks? I can find them here big time. The actual reason is that I visit here at earnings time, post a few messages just for the fun of it -- and, maybe there is a part of me that wants to try to blow a hole in the pomposity of crazy optimistis who try to argue to people that they should risk their money on this stock. So then: why do i visit here every three months? Because some day the real estate market WILL start to go north. And then, when CHCI is somewhere around $1 -$2 I will wait to see results and market conditions that will drive it to maybe $4 or $5 and then i will buy this baby for a long strong ride up. In fact, if you go way back in my messages, that is exactly what I have been saying for months and months, each earnings report when I visit here and post. Sit on the sidelines. Watch this stock go down. In the meantime, understand it and its management. Then, be totally prepared to buy-in. But this is sure as hell not the time -- this stock is going to lose maybe 50% or even more of its value as of today before the stock gives the slightest and earliest hint that it is a buy. That make sense? Or will you try to find some reason to keep trying to tell people to lose their money on this stock?"
Want similar records of my predictions on this stock? try this of Aug 8, 2006 -- also a bit more than a year ago: http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_C/threadview?m=tm&bn=24776&tid=2761&mid=2774&tof=36&frt=2
In that post. among other things (check for yourself), I wrote: " The best course of action here is the same I recommended months and months ago: if you like the idea of the company and its markets, get out, sit on the sidelines, let it go down, and come back in later when the homebuilding stocks and their markets move back north and catch the wave then."
When these predictions were made: On August 7, 2006, the stock was trading above $5.50.
So, I CAN evidence precisely what I just recently posted -- that is, that the stock would be between $1.00 - $2.00. I was also saying the same thing when the stock was in the teens.
Now ... how's YOUR prediction skills Fisher Biz, and how much money have you lost sitting in this stock, which you would not have lost if you took my advice? Or, maybe you owe an apology?
If you want to really paint a bleak picture go back to to 2001. Thats where all property might be headed. How do you think the market will handle a 25% devaluation of American real estate. I wonder if the stock market would hold up. With higher mortgage rates, and new lending rules it could unravel rather quickly. Maybe we could put together a cheering section. Maybe the rest of the world who bought these mortgage backed securities would be so mad they would stop lending us money. Then we could have a real depression. What would Kudlow do?
No, this week is hedge fund redemption week. That means investors can call in their money this week, or it gets locked up for another three months. It's all over the message boards. Hedge funds are being forced to dump valuable assets to raise cash for redemption. That reduces their leverage on short positions, forcing them to cover, which costs them cash, so they have to sell more assets, etc. etc. That's why we're seeing these funds going under.
You can expect bashing of heavily shorted HB stocks all week. You can also pick up some great bargains right now, or wait three months for the next round. The Fed will let this happen, but they won't let it spiral out of control. The companies who were issuing mortgages the way they also now issue credit cards to teenagers with no income, and even the family dog, are getting killed.
"It's not clear whether Sentinel has received a lot of redemption requests from its clients.
However, this week is a crucial time in the hedge fund business. Hedge funds usually lock up investor's money for three months or longer. There are also redemption notice periods, which give managers time to raise cash to repay investors.
If investors want to get their money out of a fund by the end of the third quarter, many redemption requests need to be sent in this week, according to Mayflower's Glazer.
That, in turn, may be causing hedge funds to raise cash now in anticipation of big withdrawal requests. Some of those managers may be calling on Sentinel to get part of that money."
I actually like your post. I even thought about getting out of CHCI after the conference call. I was very disappointed that so many Eclipse sales got canceled.
The thing is that EVERY time I try and get out of a stock and wait for it to come down, almost at that precise moment, the stock price recovers. OTOH, I would not be surprised for the stock to dip below 1$. After all, it was at 1.24 just a week ago. And today was another low volume down day.
Remember when every CEO was talking about "dancing at the bottom"? There was no evidence to support that assertion and indeed that assertion turned out to be false. Yet, the stock went from 3 to 6 and most HB stocks recovered.
This is what might happen just now. Analysts will start saying that p/b of 0.25 are aberrant, people will realize that and stock will go up. It will not go to 6 or 7, but it might to to 4 or even 5 with some luck imho.
I remember reading that during the last downturn, the p/b bottomed at 0.5. Or am I wrong here? In Comstock's case, the p/book is about 0.28. Even the analysts expect a dollar loss in 2007 and a return to (minimal) profitability in 2008 (see Yahoo estimates). The stock is clearly priced for a high probability in bankruptcy. At 1 $ the p/b will be 0.14 . You said you do not expect BK. But do you expect a 100 m $ write off?
And if in 1 week CHCI would trade at 1$ per share, would you say that you think CHCI is actually worth 50 cents?
Also, one common assertion I see is that new orders have decreased during Q2 on a YoY basis. New orders actually INCREASED.
During the CC, Clemente said that he does not expect the market to bottom.
That might mean no impairments during Q3 (because the impairments in Q2 were assessed assuming no recovery) and, if such was the case, Q3 would actually be profitable.
There are almost no options and feasibility costs left, so not much there to impair.
Excellent description of future growth/slide for CHCI.
Washington will be the pivotal market for their return to profitability and robust future growth, not Raleigh or Atlanta. Both were purchased companies with debt problems. Their large raw land positions were killing them and without CHCI doing indepth D D prior to purchase and assuming their attached debt placed CHCI on crash course prior to market slide. This has and will continue to challenge future growth. Both require immediate spinoff of assets +/-, bite the perverial "write off" bullet, again and move on. When you own "sick assets", you cut losses and move on.