more info, page-8

Valuation using DCF and EV/EBITDA methodologies at 41c per share.

Very undervalued in comparison to it's peers, eg. Nick Scali and Fantastic.

Forward forecast of 3.6c EPS. 4c+ in '09.

EPS seems well on track (and some)...total sales lagging Microequities forecasts.

I have not seem an updated forecast from Microequities since the results were announced. (I have done my own, though).

We know that first half results came in at 2.6c EPS, which is encouraging in light of the 3c earnt for the full year last year. (2nd half earnings are typically lower than the first half).

So, building some conservatism into forward forecasts (as always :-)) I'd like to think that they will still comfortably hit 3.6c EPS at year end....and have rolled out even more stores in the period as planned, the benefits of which to come in the period 6-12 months on.

Some will be looking at the top line growth (flat)and be negative on that, despite the stellar improvements in profit margin, cost control, etc. that lead to the big jump in NPAT and EPS and had these two in-line with Microequities forecasts despite a seemingly lower top-line figure than they envisaged.

But when I visited Kresta in early December it was indicated that just two new stores had been opened at that point in the half, so the other three stores opened very near to the end of the half.

Obviously the contribution to earnings from these stores is not going to be very evident in the first half, and there were also store set-up costs to be incurred, etc.

Kresta management's plan is quite obviously to grow earnings through agressive new store rollouts.

That said. Kresta's management seem to be quite a conservative bunch and I like that alot right now, given the store rollout plan and the uncertain economic environment ahead. This company has had a troubled past, from which they learnt alot and turned the corner.

I'd rather not devulge anymore information from Microequities, if you want more detailed information you really should pay them for it. :-)

The micro/small cap companies right now are getting very little attention in the market.

Even companies coming out with good results are often thin on the bid as the market looks forward 6-18 months to an uncertain environment.

If you find something you like on a valuation basis, it feels like you have a tonne of time to get your position set(like...6 months).

But personally, I don't have a problem being early, particularly if there is a big dividend involved,I think the downside is limited, I like management, think the stock is still undervalued even with an uncertain economic environment ahead, and I have a medium term view.

This post probably went a bit off-track a bit, didn't it?

This is MY style and why I invest in companies as above. I also like big positions.

It very well may not suit many of you reading this.