CBI. Looks like the folks here who were negative on the company/stock last year have been shown to be correct. Anyway, the stock's down from my 7/15 $45 purchase price to near $31 now. I'll take a few more shares at current price (total is a very small tracking position), with the intent to hold another year to see what transpires.
Some plusses and lots of negatives. On the one hand, backlog is $19B, but doesn't seem to be growing over past quarters. And the orders they have completed aren't bringing in profits. Margins are down. And I assume the backlog could shrink with cancellations if the economy sinks.
While the last quarterly report offered some encouragement (of course), the Pres/CEO nevertheless last month sold over half the shares he holds. Also there have been persistent sales from the EVP and VP/Controller. Given that the stock's already beat down, that activity isn't offering any positive (to a small outsider to hold/buy).
As discussed here previously, company may have seriously overpaid for a large acquisition and not only has this hurt CBI, but also made very difficult or compromised the analysis of the company metrics. Well, for me, a lot of the metrics I like to use (bv, p/e, rev growth, roe, etc). The p/sales ratio looks historically small (a positive for me) and the company is buying back stock (which doesn't seem to sync or jibe with what the top guys are doing (selling).
I don't know what the big picture is. I assume that with $19B backlog there is a business here (and that the company has enough brains to not keep bidding on contracts that they know are iffy as to whether they can make a profit from them). Then if there is a business here, at some point there must be value to the assets (tangible as well as managerial/technical). Well it wasn't at $45/sh, maybe it's near $31. Otoh, maybe it's at $15 or $10/sh (or less). I can stand a small position to find out. Way to scary for me to make any meaningful bet though.
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