Forum Archive Index - July 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi winner69,
 
>
>
>An extremely well managed company? - how can you say 
>that Snoopy as  CAH carry on the long tradition of value 
>destruction? 
>
>


I think it is possible to have a well managed company in a dog of an 
industry.  There is some quite innovative stuff going on at CAH.  

Like the idea of breaking their business up into quite small focussed 
units.  

The idea of not fully pruning their trees like they always 
did because there is no guarantee that the extra labour will 
translate into future value is innovative too.

I admit the history, share price wise, ever since International Paper 
has become involved, is not that good.   Over the last twelve months 
or so, though, I am showing a nice little gain. 

CAH have now built a substantial presence in Australia, which I 
think is the right way to go.  I'm looking forwards, not backwards.

If you want to see what happens to a company that doesn't take these 
initiatives, look at FFS.   CAH well managed?  In comparison to FFS, 
I think so!


>
>
>A return on capital invested of only 3.4%.
>CAH cost of capital is 14.6% (PWC).
>
>


Where does the cost of capital figure of 14.6% come from?


>
>
>Maybe this is why the market has not reacted
>to this 'good' result.
>
>

Holding steady in a falling market is a 'good' reaction

>
>
>Snoopy - bit puzzled why you have CAH.  Doesn't seem 
>to fit with either your income strategy or your growth
>strategy. And Warren wouldn't be too impressed either.
>
> 

Fair comment.  I guess I am looking to quit CAH in the medium term 
for those very reasons that you mention.  I did quit my small holding 
in FFS a few years back, but held on to CAH as the best forestry 
investment I could make in this country.  I still believe CAH is the 
best forestry investment around, but I am not so sure that forestry 
is the place to be invested at all any more....

SNOOPY



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