Ann: Trading Update, page-114

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LachlanC95

63 Posts.

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19/06/23

11:51

Post #: 68356241
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Originally posted by PabloB: ↑

Retail offering great value for those with a timeframe longer than 6-12 months.
The market being forward looking will price the change in - e.g. NCK bottomed within a couple of weeks of Lehman collapse despite what happened (and length) thereafter.
DSK hit by negative operating leverage in a negative part of the cycle - i.e. <10% drop in sales yet >50% drop in profit. Throw in HoH seasonality to confuse the punters into claiming loss-making or a fad.
Bears will point to the SP and call value-trap as they comp to FY21 which they called abnormal at the time (but not pre-covid FY20,19,18,etc).
For example FY20 did $9m profit from 110 stores in a normal rate environment - with steady growth in the right areas.
Now DSK have grown store count to 145 stores (+35% on pre-covid) with more to come - do the maths on what normalised earnings could look like - then compare to the price of $62m MC or ~$40m EV (adjusted for HY divi + tax + $2m loss).
Sentiment always turns. The bears have the glory for now but the SP follows the EPS LT.

Lots of other retail gems to be had too IMO - maybe one last flush of negativity to come in the next couple of months (JBH,HVN,LOV with their own warnings?) - then it's pin your ears back (I am hoping so to DCA more).
Each to their own strategy - I have seen some people try FA but are really TA guys (they're easy to spot) - make sure you know who you are.
GLTA.

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I am of a similar view and strategy. In 2-3 years time the divi’s will replace a lot of my active earned income, or I’ll be having nothing.

But I like my odds.

For me - this bet works out perfectly.

Each to their own.

DSK Price at posting: 93.5¢ Sentiment: Hold Disclosure: Held
2 Upvote

0 Great analysis

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