BST discussion thread, page-8

I believe the share price weakness is based on two uncertainties and also a lack of growth potential, which makes this quite unattractive for a lot of funds, who hate uncertainty and stagnant growth.

1) allegro own about a 1/3 of the company after selling 11% at a significant discount to the market price of 2.70 at 2.30 on the last results. They are probably looking to offload more after half year results.
2) the 20 week update was underwhelming with the excuse given that summer hadn’t hit yet. Some other retailers seemed to have been going ok, including competitors Wesfarmers, jb hifi putting out guidance they were doing well.

I believe big hitters will wait on the sidelines till they have clarification about who’s going to buy allegro’s stake and at what price, tho once that’s sorted the price will rally - albeit with a potential of dropping further in the short term. I also think that best and less will not fall off a cliff in terms of demand, as it’s a fairly generic, essential product that has to be bought as babies and kids grow. They make 86% of their stuff in house have managed costs and inventory well through a tricky period and have increased margins.

well run, no debt, solid if not spectacular, longevity, recession proof product at a pe approaching about 6-7 with the cash they have in the bank. I’m happy to hold for a couple of years and expect a climb back up to 3 dollars plus once the short term headwinds have abated. In the meantime I’ll likely get close to 50 cents of Franked divs in the next 20 months…