Regarding CNGR. LOL! That is one - or is it ten - heck(s) of a company. You buy this stock, you go partners with used car dealers. And from Texas no less. They and that are waaay scary to me. I'll always wonder if anything written by these guys and their lawyers regarding the company or stock is anything like the way their car/finance contracts reflect what their salespeople told their customers. And a start up casino in El Salvador. What is that all about?
Rather than me dig deeper, I'll just defer to Timba's analysis or anyone else's for that matter. And say that it's likely a reasonable thing to do for you/others to put the stock on a watch list to see if a breakout occurs and if it does, then spend some time to look again at the stock.
I do believe the pride/shame ratio is very low here. This stock - those people - those businesses .... none of it is anything anyone would want to be discussing at cocktail parties. I gotta chuckle/laugh/shake my head/ at anybody who'd actually go ahead and buy this thing (assuming the person wasn't an employee or relative).
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OTOH, calming down a bit and looking just a tad closer at this ugly story...
MAYBE these Car Execs are doing what they know how to do. Buy something, tweak it and hold it, and sell it. If it (a business) isn't working satisfactorily, sell it. Wheel and Deal. Do what works. They know they are in a bunch of disparate businesses that nobody can figure, so they've said they will work to improve communications and work to improve stockholder value (by buying shares).
This is a company (or companies -g-) selling at 3.75, 50c away from its low, with a tangible book over $6. Price/sales about .1. P/e under 5: From their March 9 report, "The overall performance of the Company during the first nine months of fiscal 2001 suggests that this will be another record year in sales and earnings." Well, they earned over $1.5/sh in each of the past two years. The company looks (??) like it's showing positive free cash flow (I'm not sure if I see this correctly.)
They've taken on a heap of debt: debt/eq - 3.1. Who knows how many bad loans they've made to maybe goose earnings or how understated their allowance for doubtful accounts is, or what will happen to overextended, marginal people who will default as or if the economy worsens? The market certainly doesn't value this business (CNGR) very highly.
Still, the company's core (90%) sales and financing activities are distributed within multiple dealerships among several states, so that might balance some default risks that are geographic specific.
I say the stock's a value buy. (Subject to my reading up further on their businesses.) It would be suitable for someone with an 18-24 month perspective, someone who would hold this stock in a diversified portfolio (i.e. who isn't trying to make a fortune off this one stock), and someone, who, if he or she goes to cocktail parties, doesn't talk about his/her specific stocks.
-g-
Paul,
who meets some of those qualifications. |
