agree ----- i was just saying that if u look at them as a...

agree ----- i was just saying that if u look at them as a company - theyre an very good and efficient business , which even if theres a slowdown in earnings and growth to no growth , youre still getting unbeleivable returns on equity (issued capital) and on debt . This can only mean that cash is retained every year and builds and builds. So what are they gonna do with all that cash??

ROE is 40%....lets say that slows down over time coz theres more and more retained earnings from free cash flows...so we have ROE of 25-30% and no growth....thats STILL great...coz theyd have to return all that excess cash to shareholders

GROWTH is te issue, but even if theres little growth, youre getting a very efficient business with unbeleivable returns even if ROE falls a little

Just like coca cola or woolworths

Growth is 5-10% but returns on the contributed equity and debt are very high; Theres free cash flow (post divvys and CAPEX in many years); Divvys grow ; Cash grows for further CAPEx , takeovers or simply for higher divvys and cap returns

These are good businesses for those reasons

Thats why a PE of 12 historic is pretty cheap for JBH , AS LONG AS EARNINGS DONT GO BACKWARDS from now on

I dont think earnings will go backwards, theyll simply stall until the retail environment changes tune....


So PE 12 historic is cheap; PE 10 forwards is very cheap (but even if theres no growth in 2012, PE is still gunna be 12 which is good, and ud think that the biz will still grow in the future when retail turns).

SO from this perspective it could be a good buy here for a medium long term invesn=tment perspective

I guess if margins get hit in a bad way on EXISTING STORES, itll be bad, but theres already been a MASSIVE drop in PE and share price to factor this in i guess.

FUNDIES SUPER FUNDS will take a look at this one very closely coz fundamentally it looks good at this PE unless EPS startsd going backwards from now on

I reckon 15-16bucks is a good buy long term on the leading aussie retailer

youre downside is maybe another 10% if theres A BIG DROP IN MARGINS AND EXISTING STORES, but youre upside is quite good long term if you think that growth in existing stores will taper off to 0% short term, but that the retail environment will rebound abit, AND jbh can still grow its existing stores by 5-10% in sales over the long term

Again youre paying PE multiple 11-12 historic for an ROE of 40% (buffet says anything above 12% is decent, and above 15% is A GREAT BIZ)

Short term there may be volatility until we know what margins are like and what the future holds after the report....long term youd prob be a winner coz the retail environment is cyclical and ppl love to spend