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Strategies & Market Trends : Stocks that do well in recessionary environments

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To: stockvalinvestor who wrote (4)	10/31/2008 10:02:29 AM
From: bruwin	of 6

CQB. Had a look at their Annual Results. Growth in revenue in the last 3 years has declined from 27% to 15% to the latest 3.6%. EBITDA Margin also down in that period from 6.5% to 2.7% to 3%. IMO 3% is very low, not much margin for error. But one probably can't expect an attractive Margin in their line of business. Pretax return on Capital in the last 2 years has been negative. There has been a positive return in the last Quarter, but it's still negative in TTM. Their last 2 Annual Bottom Lines were losses, but their last 2 Quarters have shown positive Net Incomes, so things may be turning around. A big negative, IMO, is CQB's large Debt/Equity which is adding a lot of interest expense to the Income Statement which has been severely eroding its profit. That interest expense has come down slightly in the last 2 Quarters (maybe due to drop in rates etc..). However the long term debt amount remains much the same on the Balance Sheet.

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