I don't know enough about the carpet business. I believe there are some new office buildings and hotels being built in a number of US cities, mostly as the population moves around. That will be X number of square feet - much less than new homes, but something.
Mohawk doesn't look that heavily leveraged, appears to have good cash flow, etc.
Forward P/E is 11, which is not overvalued, unless the market really tanks.
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There are a lot of stocks with P/Es of 30 or more that can fall further and faster.
MHK maybe a short, but unlikley to be a really good short.
Good shorts need as many of the following -
1) Broken Charts, gaps down (EBAY, IBM)
2) Really high P/e, P/sales, and other metrics- the priced for perfection stocks- (EBAY,QCOM,DELL, YHOO, AMZN, MSFT)
3) Flaky business models, poor products, lawsuits. (EBAY, KMX, MSFT)
4) Criminal management (AIG), previously Enron, Providian, WorldCom
5) Really stupid management Hewlett-Packard, Enron,Tyco
6) "Bad Luck" - see 4 & 5 to increase odds. |
