Will a cashed-up Solomon Lew strike at Myer?, page-9

Hi Keygeo,

Good to see some intelligent reasoning for the other side of my position. I'm long with an average price of $2.03.

"as a matter of interest the stock has been downgraded twice in the last two months by analysts"

I pay no attention at all to changes in analysts opinions. When I use to, it cost me dearly.

I look at the foreign owned DJ as a positive for Myer, something they can use in their advertising, ie Australian owned and run.
This years profit and cashflow is likely to be down a bit $5-10m for Myer, partly because 3 of the top 20 stores are being refurbished, plus costs from closing a couple of non performing stores. So next year is a likely better performance. However whether I'm still holding by then I don't know (I believe in taking large "outsized profits").

As an iconic brand, paying a very good dividend FF, I didn't see much downside when I bought. I still have an order sitting in the market at $1.96 that never got filled. Because we are heading to financial results and final dividend time, these are likely to hold the stock up, as has happened previously.
Myer also managed to pay off $100m in long term debt in the first half this year, as well as pay the dividends from cashflow. There would have to be a large turn around for the dividend to fall. In the short term
all that is likely with lower cashflow is less debt repayment, they can maintain the dividends easily. The good return in an environment where interest rates are low and staying low will underpin this stock from much in the way of downside.
There is also the new players on the register to consider, GS, Harris Associates etc. This leaves the register open should some-one want to purchase the whole company, something that should be considered
possible before I would go short.
Anyway, thanks for your thoughts on the short side.