tag:blogger.com,1999:blog-3190293047729939700.post6765408261070731146..comments2023-11-02T05:09:10.845-04:00Comments on my Value Idea: Commercial Real Estate: The lost CycleSamihttp://www.blogger.com/profile/17866240785310374236noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-3190293047729939700.post-4870692581880654122008-08-30T19:26:00.000-04:002008-08-30T19:26:00.000-04:00I have a question related to CBG. It appears CBG's...I have a question related to CBG. It appears CBG's margin is very thin, with 1.3 billion revenue, the income is only 16 million. Is there something terribly wrong with this company's business model? The company appears to have very thin margin, and they are not able to reduce cost when revenue shrinks. Do you know why their margin is so think? Is it because they pay high commissions to employees and their employees are overpaid? Very thin margin and mindset of growing big with acquisitions even at the cost of profitability are big risk factors for stock investment. I want to know why you think CBG is a good buy given their high fixed cost nature and habit of big costly acquisitions. I think from investment perspective, this is the kind of stock one shall try to avoid. In good time it's hard to tell the true risk of a business, but in bad time, one can clearly see the risk factors of a business. With so many choices in real estate market, I don't see any compelling reason to buy CBG. It doesn't pay a dividend, the management is not prudent and make big acquistions at the top of the market, fixed cost is high, has a bankruptcy history.<BR/><BR/> Another big negative factor is that they have 29000 employee and only less than 3 billion market cap, something is not right about this company. I typeically don't like company with large number of employee and low market cap, that only means the true productivity of the company is very low. There are so many employee want to share the wealth created by the company, how can this be a good investment if so many people need to share the upside. Google has less employee and much big market cap, that means either cbg overpaid their employee or the productivity of their employee is very low. In the long run, I don't see how one can make decent investment in this company unless they are very good market timers.Anonymousnoreply@blogger.com