jbmurcfat prophets told people to avoid, short sell JBH at...

jbmurc


fat prophets told people to avoid, short sell JBH at $8.75.

The stock has risen 50% since then. Not a great call so why trust their view.

If you think JBH and other electronic retailers are similar and then include grocery stores also selling no-name brand dvd's then you might wanna get some new glasses.

Sure, if people stop spending money all retailers will drop. That's the risk you take for investing in stocks.

AWE may have a low forward P/E but they have a rapidly declining production schedule. Look at their earnings beyond next year ot the year beyond that. They need to find more oil and as we all know that's not a small feat. Oil business is risky. Every dry hole will send their share price down and drilling costs alot of money.

JBH has a long history of rising profits. Comparing JBH to AWE is like comparing apples to oranges.

JBH is where it is because they consistently increase net earnings by 40%+. They deserve to trade at the current forward P/E and deserve to continue going up as long as earnings continue to rise this rapidly. They already predict a revenue of $1.7bn next year. I think their can trade at a market cap at 1 times revenue. Hence they can still go up in share price.
Christmas period is often a strong period for retailers. Could be a good 4 months coming up for JBH.

The stores are set up perfectly to attract the younger crowd who spend money. The sales people don't jump at you and hassle you. I can browse a JB store for hours and not get hassled.
Management is top notch as well. They know what they are doing.
Their model has now proven to work in NZ. If they can take their model to other places overseas then look out.

Risks are the usual economic/retailer slowdown, but then everybody will get affected anyway.