I do not currently own this stock (TSX-CRW.UN). However, I did own stock in this company from February 2000 to Jun 2007 and I made a return of 19% per year. This is a company in manufacturing, and it has a habit of reinventing itself. It has manufactured the different mediums that we have used over the years to record music and films etc (that is home entertainment). It started with 8-track and cassette tapes and has is currently manufacturing CDs and DVDs. It might just reinvent itself again.
So, that is why I am continuing to track this company. You never know when it might be a good investment in the future. It is also good to look at companies that have problem was well as those that have none currently. I think that once you invest in a manufacturing firm, you may be getting some good diversification, but you probably cannot buy the shares and ignore them. There are some parts of the market where you can make good money, but that you have to watch more carefully.
The reason why I sold this stock when I did was that they got into some difficulties. They are in a business that has a habit of getting into difficulty as the medium that is used in home entertainment continues to change and will so in the foreseeable future, as far as I can see. The share price is down to a $1.00 currently, so needless to say, anyone who has invested in this stock over the past 5 or 10 years has lost money.
There are some bright points. For example, this company is still has a cash flow. This is a better indicator of how a company is doing than the earnings or EPS figure. Also, over the past 3 years they have been adding to their cash.
However, the company does have some problems. The biggest is their long term debt that is due in May of 2011. They have found no refinancing for this yet. We are in a recession, and refinancing in a recession is always difficult, especially if the company has problems. The other thing to affect investors is that this company has no book value (the book value is negative).
As I have said, I will continue to track this company. Tomorrow, I will look at what the analysts are saying about it.
Cinram is the world's largest provider of pre-recorded optical discs and related logistics services for leading motion picture studios, music labels, publishers and computer software companies. Cinram also provides distribution and logistics services to the telecommunications industry in North America and Europe through its wireless subsidiaries. Its web site is here Cinram. See my spreadsheet at crw.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
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