worth some research

In August/September this year I successfully traded Foster’s Group Ltd (FGL) such that I now own over 3,000 shares for free after sales, which should generate over $750 in fully frank dividends each year. So as part of my sustainable drinking program FGL contribute over $14.40 per week via their dividends. Hope to increase this figure in 2010 by repeating the strategy in August 2010. Alternatively I could sell my current holding for about $17,000 tax free.
Making a 5% gain in a month translates to over 60% on an annualized basis, while 10% translates to more than 120% on an annualized basis.
With these thoughts in mind I am going to try & trade Myer (MYR) between now & the end of January 2010 such that I hope to finish up with a parcel of free MYR shares that should pay around a 20.5 cents p.a. So effectively MYR will pay me money to use at their stores.
Factors that could improve the MYR share price include the following:
1. S and P announce Quarterly rebalances to the S&P/ASX indices & given MYR have not been included in the December Rebalance it is highly likely they will be added in the first rebalance in 2010. They are current in the Top 100 companies by Market Capitalization (refer AFR figures 7/12/2009).
2. Myer One shareholders hold a large amount of stock & are unlikely to be sellers especially below $4.10. 27,964 shareholders hold 1,000 or less shares, while 24,567 hold between 1,001 - 5,000 shares (refer MYR ASX Announcement 6/11/2009). So most of the selling has come from the institutions, who have dumped MYR after listing. Much of the MYR stock on IPO found its way into weak hands including some Hedge Funds who caused the initial selling, they were always going to be “flippers”. Whilst this stock is now bedding down in stronger hands any inclusion of MYR in the ASX indices will force some passive funds to buy to establish their correct weighting & this could easily force up the price.
3. MYR have reported first quarter sales up 5.2% on the same period (refer MYR ASX Announcement 5/11/2009). The Westpac Survey of Consumer Sentiment shows a 34% increase in consumer sentiment since May 2009 (refer MYR Prospectus), this is a positive indicator for a recovery in consumer demand.
4. Sales & EBIT are generally higher in the first half of the year as this half includes the Christmas trading period. I would expect by early February MYR would have announced this officially to the market, but I am sure we will all know how successful Xmas Sales have been by the start of the New Year & MYR will be rerated accordingly.
5. If MYR sold on a similar P/E ratio to David Jones (around 18.63) MYR would be about $5.08, even at a 10% discount to this P/E ratio (16.76) MYR would be $4.57 per share.
6. MYR cost of doing business (percent of sales) was 29.9% in 2009 c.f. David Jones (DJS) 30.3% in 2009.
7. Bernie Brooks, Myer CEO was a chief architect of Woolworths’ Project Refresh, which reduced costs by more than $5 billion over 5 years.
8. Several prominent retailers have come out & forecast a very good Xmas Retailing Period.
9. National Retailers Association is forecasting a 5.5% increase in Xmas revenue (refer Channel 9 News Monday 7/12/2009)
Given these factors I have established a large holding that I hope to trade successfully over the next 2 months such that I will finish up with MYR shares for free & pay a dividend each year.
Please note these are only my personal thoughts & no investment advice is given. Please do your own research on this company.
Regards
Buffett