I suspect CHB's relative multiple is moving to be more in line with its relative debt level. I've seen this before recently with the oils, just as they were putting in a bottom - the ratios among the stocks line up according to safety in the event of a doomsday scenario. IMO, most of the housing stocks, manu housing, RV, construction products, and that ilk have been doing this this last 3 months.
To be honest, I hesitated a bit in buying more Champion. I already own National RV and several other stocks that are likely to be affected by the same macrotrends as CHB. But basically, my portfolio has grown significantly this year, and the average position size has grown proportionately. My older Champion position was the smallest in my portfolio, which didn't fully represent its true position in terms of relative appreciation potential, so I upgraded it. I feel I have a good level in the 18's where the downside is severely limited. True, the stock movement has been bearish, but it has only fallen back to old support. It has bounced rather sharply off this level several times. If CHB moves to new lows, I will be exiting the stock. Not a value investor-like thing to do, but to close below 17 would be a very difficult thing for this stock to do. If it happens, I'm probably not aware of something, I'll have a small loss and that'll be that. Gone are the days when I impale myself averaging down in an underperforming, technically damaged position (I hope).
Mike |
