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TRI Pointe Homes, Inc. Message Board

joeletaxiiii 12 posts  |  Last Activity: Dec 16, 2014 12:20 PM Member since: Feb 16, 2000
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  • joeletaxiiii by joeletaxiiii Dec 16, 2014 12:20 PM Flag

    Time appears to be running out for Navistar. Shares are down 11 percent today on another disappointing quarter. It is burning cash, can't even make money in a growing economy, losing market share (single digits for Class 8, down from 20 percent a few years ago), and has demonstrated an inability to achieve any forward progress. The company's bond rating is deeply in "junk" territory and it needs to pay more than 8.5 percent to borrow money while the competition is paying half that. Binders may be gone and then there will be three.

    Volkswagen/Scania may be eyeing the U.S. market but building out a distribution network in a mature market would be tough. It would be easy and cheap to buy NAV, but the company is toxic. A cautionary tale. If Icahn throws in the towel then look out below.

  • Reply to

    Stock should be down 10-20% on Fine News

    by neodinium1978 Dec 5, 2014 10:22 AM
    joeletaxiiii joeletaxiiii Dec 6, 2014 3:15 AM Flag

    PCAR has a nearly $25 billion stock market capitalization. If the fine were $250 million that would represent 1 percent of the company value. A 10 to 20 percent drop in stock value (as you suggest) would represent $2.5 billion to $5 billion in loss of market cap. Even worst case scenario any potential fine won't come close to this amount....

  • Reply to

    EU fine up to $384 million

    by neodinium1978 Dec 4, 2014 9:49 AM
    joeletaxiiii joeletaxiiii Dec 4, 2014 2:27 PM Flag

    A quarter of a billion dollars would be about $0.70/share. Ultimate fine could be more, could be less. To Paccar's advantage, the fine would probably hit its European rivals relatively harder than it hits Paccar. To Paccar's disadvantage, it isn't viewed as a "European" company and likely isn't as politically connected as the other firms. The raids took place in January 2011 and apparently involved emails. Seems the case would be dropped if there were no basis, but evidence appears tenuous since the companies appear unwilling to settle.

  • Reply to

    EU fine up to $384 million

    by neodinium1978 Dec 4, 2014 9:49 AM
    joeletaxiiii joeletaxiiii Dec 4, 2014 2:20 PM Flag

    MAN AG has been revealed as the snitch and as such has indicated it will not be assessed a fine.

  • Reply to

    EU fine up to $384 million

    by neodinium1978 Dec 4, 2014 9:49 AM
    joeletaxiiii joeletaxiiii Dec 4, 2014 12:51 PM Flag

    Actually, the EU rules say they can fine up to 10 percent of WORLDWIDE revenues (this is intended to make the fines *meaningful*, even for companies that are perhaps much bigger outside EU). What I find interesting in this case is the language from the new EU Competition Commissioner, Margrethe Vestager, who said that she believed the case would be extremely difficult to resolve through agreed settlements. In agreed settlements companies typically pay reduced fines in return for admitting anticompetitive behavior to expedite the investigation. When the EU calculates its fines, in past cases, it reduces the fines for companies that cooperate - often by 50 percent, and it seems companies that agree to the settlement are universally given a 10 percent break, but this limits their ability to appeal. The snitch can benefit from 100 percent relief, even if they were the worst offender. Scania has indicated that it is cooperating fully. Vestager seems confident that she has a case, but most of the companies appear to disagree - usually they just roll over because they fear paying the maximum fine. To my mind, this is a problem with such arbitrary, statutory fine levels - as the fine doesn't necessarily bear any relation to the damages (think Daimler). As I mentioned in an earlier post on this board (hint to neodinium: to avoid duplicate posts, read a few previous topics before posting), Volvo Trucks has reserved 400 million euros for this case (about $500 million). Paccar's worldwide revenues are about half as much as Volvo, so do the math. But - Volvo may be cooperating to some extent and factoring this in their calculation. Daimler set aside a nine figure reserve (in euros) back in 2011 (no indication as to precise amount). It seems the other truck makers would need to set aside reserves in the coming quarter or face potential lawsuits from shareholders. Vestager has said, “Fighting cartels will be one of the priorities during my mandate,” so we'll see how this unfolds.

  • joeletaxiiii by joeletaxiiii Dec 3, 2014 8:48 PM Flag

    ACT research reported after the close yesterday that Class 8 truck sales were up 97 percent versus last year - 41,000 units (more than 10K above expectations) and the 5th best month on record. Coupled with a strong October, this will likely lead to to bumps of next year's earning estimates and increased price targets for the group. Likely explains today's stock price action - up 3.5% at the open.

  • Reply to

    Volvo Trucks Marketing

    by joeletaxiiii Dec 3, 2014 1:20 PM
    joeletaxiiii joeletaxiiii Dec 3, 2014 8:41 PM Flag

    See new topic!

  • joeletaxiiii by joeletaxiiii Dec 3, 2014 1:20 PM Flag

    They really do have the best marketing department in the industry-and one of the best for any capital goods maker. After the awesome JC Van Damme video and the Italian valet video they came up with this:
    https://www.youtube.com/watch?v=PlFiKo64kQw

  • Paccar locked out 800 workers at Ste Therese (Montreal) Class 6/7 production facility on Saturday. Seems they can just rerun this headline every 7 years or so. Maybe this time they will close the plant for good and move production to a friendlier spot.

  • joeletaxiiii by joeletaxiiii Dec 3, 2014 12:59 PM Flag

    VOLVY has set aside ~$500 million in reserves related to the EU cartel (price fixing) investigation (initiated with raids in 2011, and concerning allegations that date back 10 years). PCAR is about half the size of Volvo. This could impact Q4.

  • Reply to

    Drop in Oil Prices Good or Bad For PCAR?

    by slavoy01 Nov 29, 2014 11:06 AM
    joeletaxiiii joeletaxiiii Dec 1, 2014 6:25 PM Flag

    The first sentence of Mose's initial reply was spot on - and perhaps the best thing he's written on this board ever! Wow!

    Reduced fuel costs = higher investable cash flow for operators = more truck sales. While the shale boom uses some trucks, lower fuel prices will help the overall economy - things like housing, etc. This will more than offset any negatives from a slowing in the $65+/bbl prod'n cost oil fields.

    This is an unusual situation in that a drop in oil prices usually correlates to a slowing economy.

    Sentiment: Buy

  • joeletaxiiii joeletaxiiii Nov 24, 2014 11:25 PM Flag

    Tough to read too much into short position - some of short position at any given time might be related to Toronto market arbitrage.

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