long term direction?, page-3

Before anyone says JBH business is dead because of the internet please think and do your research.

Cost of doing business (CODB)

JBH : 2007 = 16.05% 2008 = 15.31% 2009 = 14.73% 2010 = 14.49%

Dick Smith & Tandy: 2007 = 22.68% 2008 = 22.72% 2009 = 23.68%
2010 = 24.85%

If JBH tanks Dick Smith, Tandy and every other electronic retailer will tank before. I have yet to see any major retailer go bankrupt.

CODB for JBH is comparable to pure internet retailers and still going down. I have checked prices between goods and have yet to see outrageous bargains that warrants the death of bricks and mortar model.

Yes I agree internet sales will increase going into the future but there will always be market for brick and mortar retailers and JBH is the number one retailer to fill this market. The internet is not the be all and end all of the brick and mortar model. The internet should be used as a compliment to sell products. Human beings are tactile creatures and like to see, feel and touch products before purchasing.

JBH has an extremely strong brand equity and also has a strong internet presence. The company if need be can switch to a pure based internet retailer without much hassle. This is a hypothetical which I dont think will happen but im just stating that JBH will survive in any form going long into the future.

For years analyst have touted the death of Flight Centre(FLT) and good old Screw Turner didnt listen but just kept growing a great business. Humans still want face to face sales. FLT is still pumping out great earnings no slow down there.

Im not going to provide numbers but Roger Montgomery has stated this company as being valued at ~19.70. My valuations are slightly lower but JBH is still undervalued at current prices. Roger Montgomery will eventually be the greatest Australian investor and I listen to his opinion heavily.

Although JBH is reaching maturity at current prices it still is a great buying opportunity. New technology and new gadgets will mean more sales for JBH.

Please note I am not a licensed adviser just a student of the game with 75% of my portfolio being JBH.