speed bumps ahead

In today’s AFR, it was reported CSR is a favoured shorting stock by hedge funds and short positions taken out have risen in the past week.

Unfortuneately, I see the short selling likely to escalate.

I suspect many believe the price has a long way to fall during the term of the present federal government.

There does not appear to be any circuit breakers immediately or foreseeably apparent to reverse this trend.

Fundamentally, the company faces increasing headwinds ( rising input costs and weaker demand ) which is pressuring margins.

Takeover is also unlikely, due to much exaggerated asbestos fears.

A glimmer of hope on the horizon might be newly elected state governments releasing land banks and easing development processes. But these improvements will take time to implement.

Based on recent competitors’ results and industry conditions, shareholders should brace for the possibility of a poor set of results to be reported from this company, especially in glass.

Failure of management to keep shareholders regularly informed about operations performance, cost controls, strategic directions and acquisitions progress is not helping investor confidence.