Interested in others' thoughts on MCP. I currently do not hold...

Interested in others' thoughts on MCP.

I currently do not hold but ole' MCP has been a past favourite and has made me some good money over my 15 year investment horizon to-date.

I see that they are still heavily exposed to the grocery sector, and this comment from CBA as it relates to WOW is worth noting:



No let up for suppliers IMO with the grocery trade still looking to get blood-out-of-a-stone I reckon.

Other concerns for me relate to;

(1) AUD decline which should continue and the difficulty in passing on cost increases to the Australian consumer

(2) Disappointing performance from household appliances division so soon after purchasing it. Did the former owners sell at the peak?

(3) There has been no reduction in the debt position

(4) Both inventories and payables have had to expand materially to cater for the new acquisitions / product ranges / agency deals

(5) Continued poor metrics that others have previously mentioned e.g. ROE / ROFE

Whilst the yield is great is this the case of a value trap? I will keep a watching brief and possibly enter during the next market crisis when MCP may be materially cheaper.

Cheers
John