Hi Skip, i can see where you are coming from but i tend too disagree. you are making certain assumptions in your rationale which may or may not eventuate. i am not expecting that they will maintain current dividends i have allocated a 33% decline on last dividend and a 66% decline on last year's dividend payment. If they maintain there gross margin above 25% they will pay a dividend. That is where the risk of my potential investment decision comes into play.
You are assuming that (a) the Aussie dollar is forever or at least for a long time going to be poorly valued (b) that CPR are holding a lot of stock and (c) consumer spending is going to die in the arse.
I am assuming that (a) the USD is going to get trashed and AUD will in time recover to a more reasonable rate (b) they are reducing inventories ( $16m as per last advice by comapny ) (c) consumer spending will recover in time and the NSW economy where CPR has been hit hardest will be the first state economy to recover and (d) CPR are getting a competitive advantage by setting up in certain regional cities/towns.
Time will tell , i come back to you in 6 months. Happy to admit that im wrong if it proves to be the case.
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