There is a lot of contrarian interest thats for sure.After...

There is a lot of contrarian interest thats for sure.

After removing over 40% of costs from their business model, you really cant get any leaner from an operating perspective. However, this alone is not going to ensure CAA's success. Prices need to stabilise, and volumes need to grow. While anecdotal evidence exists, thus supporting growth in volumes, its yet to be realised.

Construction activity has been flat, however it does point to a bottom and therefore growth in the near future. Most ASX building/materials/construction companies have reported roughly flat results however they also note a pick-up in the 2HCY13. This seems to be universally acknowledged.

CAA is suffering from past failures and any clear evidence in its fortunes. Once this passes, the company will be rerated. This is a long-term investment, there are no two-ways about it.

There are a couple of development which I am watching:
1. FX rate impact; the 10c drop could transform its fortunes over the next 12mths. Its a manufacturer so this translates to positive pricing outcomes (eg market share, and not necessarily margins).
2. Anti-dumping commission on which CAA is a board member. The duties which the commission hope to pass onto exporters from China will have an impact on market share (making imported products more expensive). Results of this, should be event ~Oct 2013.

The half-yearly isnt going to look great on any level. I think the market knows this already. I am naturally forward looking so I expect things to improve in 2014 (substantially). 2013 looks to be a write-off as contruction activity isnt translating into volumes. I previously thought we'd see increases in sales but its just not happening. Having said all this its not stopping me from accumulating around these prices.