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Gold/Mining/Energy : Dorel Industries (DII.B , M or T) good earnings report -- Ignore unavailable to you. Want to Upgrade?

To: Hassan Lakhani who wrote (68)	10/31/1999 4:08:00 PM
From: Jay Arkay	Read Replies (1) \| Respond to of 96

Hassan, Thanks for your thoughts and analysis. I wish that I had some of your "selling discipline"; am I correct in presuming that your holdings are in an RRSP so that the taxes on gains do not matter, or perhaps you are a US investor facing much lower capital gains tax rates than those of us in Canada? I was also interested that your Dorel price target used a PE ratio of 17.5; you are probably right that Dorel is never likely to be accorded the TSE 300 overall multiple (now nearly 30) because of its industry sector, but I still do believe that significant multiple expansion will be feasible for Dorel shares once the company becomes more widely followed by analysts and held by more institutions. I can see both of these happening within two years or so. I usually hang on to what I buy for a long time, for better or worse. On the other hand, my worst mistakes in investing (most costly) have come from selling too early. A few years back I had bought 800 shares of Dell at $18 and thought that I was smart when I sold them at $29 in well under a year. I now compute, with all of the share splits and price rise since then, if I had held on I would now have nearly an additional half million US$ in my account. Actually, my best total returns have come from long-term holdings of companies like Dorel, Gennum, and Bombardier. As for Dorel's slowdown in sales growth, I think their president put his finger on some desirable (i.e. profitable reasons) for this, such as cutting off higher risk accounts and rationalizing product lines to eliminate items with poor margins. The former motivation will prove to be quite shrewd when the next economic slowdown or recession arrives. Note that Dorel now has in place substantial production capacity to handle future sales growth. Their continuing development and introduction of new products (some in alliance with other firms such as Sealy and Eddie Bauer) also distinguishes Dorel from many run-of-the-mill furniture and consumer goods manufacturers. I think that Dorel's future continues to look very bright.