# MTS - Metcash Limited



## sam76 (16 March 2007)

significant move north over the last couple of days..

these guys own IGA 

broke through $5 today (been trying to for ages) and today is a down day.

see attached chart intraday.
http://www.tradingroom.com.au/apps/qt/quote.ac?section=chart_daily&code=MTS 

1 year

http://www.tradingroom.com.au/apps/qt/quote.ac?code=MTS §ion=chart_yearly&submit=Go!

I've been following MTS for over a year now and this has been most unusual..


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## adobee (5 June 2007)

*Re: MTS - Metcash*

MTS results out which from what I browsed look reasonable positive. However is down 6% today ? When is the dividend due ?


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## sam76 (5 June 2007)

*Re: MTS - Metcash*



adobee said:


> MTS results out which from what I browsed look reasonable positive. However is down 6% today ? When is the dividend due ?




Ex Date Amount Franking% Books Closed Payable 
04-Dec-2006 0.07 0% 00-00-0000 03-Jan-2007 
26-Jun-2006 0.06 100% 30-Jun-2006 12-Jul-2006 
03-Nov-2005 0.06 100% 09-Nov-2005 02-Dec-2005 

This is the history of dividends.

The market has slayed MTS for what seems to be some pretty good results.


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## sam76 (5 June 2007)

*Re: MTS - Metcash*

http://www.theage.com.au/news/business/investors-punish-metcash/2007/06/05/1180809473465.html

Here is some more information regarding the drop in price


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## meoden1005 (5 June 2007)

*Re: MTS - Metcash*



sam76 said:


> Ex Date Amount Franking% Books Closed Payable
> 04-Dec-2006 0.07 0% 00-00-0000 03-Jan-2007
> 26-Jun-2006 0.06 100% 30-Jun-2006 12-Jul-2006
> 03-Nov-2005 0.06 100% 09-Nov-2005 02-Dec-2005
> ...




Nice I just place order on Netwealth with limit 4.3 ^^ he he. Let's see if I m lucky enough $.$. Sometimes, market goes crazy ^^


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## rooster6 (5 June 2007)

*Re: MTS - Metcash*



sam76 said:


> http://www.theage.com.au/news/business/investors-punish-metcash/2007/06/05/1180809473465.html
> 
> Here is some more information regarding the drop in price




That wasn't the reason for the share price fall.  The Forecast for 2007/08 earnings growth to be 'high single digit' was.  In a Bull Market,  that doesn't sit well with investors.


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## kamil (12 July 2007)

*Re: MTS - Metcash*

Looks like a trend reversal. Lets see if it can penetrate that monster gap. It was heavily oversold in June. I think investors are starting to come back on board. What do you guys think?


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## GreatPig (12 July 2007)

*Re: MTS - Metcash*

Some bullish divergence last month and looks like it might be settling back onto the longer term trend line (the bottom purple one).

I was holding until back in late Feb, and it's back around the same price again now, so I'm keeping an eye on it to see how it goes.

Cheers,
GP


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## Awesomandy (8 August 2007)

*Re: MTS - Metcash*

I have mentioned in another thread that I'm considering to follow some of the institutions in selling down MTS, so I thought I might give a bit of an explanation here.

Firstly, from a more charting point of view... MTS has gone up 13c to $4.50 today, but it still appears to be in a down trend? It looks like it hasn't been doing well at all after the breakdown at the start of June. (I hope I haven't make any mistakes... my first attempt at posting a chart) 

I have also now digested the 2007 annual report. Yes, it is true that they have achieved their 8th consecutive record annual profit, with good increases in both revenue and dividends per share, but there are a few non-technical and qualitative items which I'm not very comfortable with.

The number of full-time employees has decreased by around 15%, but wages and salaries have increased by 15%. One must wonder who ended up getting that much extra salaries. 

I also note that the lost time incident frequency rate has been reduced, but the number of lost time injuries and number of hours lost has both been increased by 1/3, while workers' compensation claims have been reduced by 1/5. This seems to suggest that either the company would try very hard to refuse claims, or the employees have lower morals and try to stay off work for longer, or there so happens to be a coincidence where a lot more injuries are of the less serious nature this year. Oh, and didn't I just mentioned that the number of full-time equivelent employees has been decreased?

I'm not sure if I'm reading this right, but it appears to me that record profit in MTS will not continue for very much longer. Hopefully, I've explained myself well enough as to my consideration of closing out MTS even though the technical numbers in the 2007 annual reports are of a positive nature.


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## Miner (1 February 2008)

*Re: MTS - Metcash*



Awesomandy said:


> I have mentioned in another thread that I'm considering to follow some of the institutions in selling down MTS, so I thought I might give a bit of an explanation here.
> 
> Firstly, from a more charting point of view... MTS has gone up 13c to $4.50 today, but it still appears to be in a down trend? It looks like it hasn't been doing well at all after the breakdown at the start of June. (I hope I haven't make any mistakes... my first attempt at posting a chart)
> 
> ...




Hi MTS holders / researchers

I was looking for some information on MTS and found since August 07 there was nothing posted.

Would some of the experts in retail sector who following MTS could say if there is any charm to hold (I hold it at the recommendation of Bell Potters and the price has fallen down substantially since I bought) it at this price or should be added up or sold ?

WOW is fascinating but MTS is not. They have had soem fire in one of the big warehouses but no real update.

Regards


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## Rainmaker2000 (1 February 2008)

*Re: MTS - Metcash*

Mate, MTS is more fascinating than WOW.......seriously, I would prefer owning MTS which is now a little cheap but not a steal in the context of current market.

MTS is valued less than WOW and Coles but I think has better growth prospects......which are probably not as good as five years ago but are pretty good........MTS long term performance makes Coles and Woolies performance look like a mere speed hump.......the same management is in place that has been delivering

It's got bout 5% dividend and they are actually continuing to grow quite agressively.  Just starting to move into fresh fruit and Veg, many new outlets IGA's opening still......they are refurbishing many stores.....no news from these guys is just the sound of money piling into the till


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## ROE (1 February 2008)

*Re: MTS - Metcash*

Remember MTS is in selling commodity business and in commodity business
the cheapest price seller wins.

MTS grocery price is higher than WOW and Coles due to the nature of their target and audience. Local shop, remote place etc.

Yes they are doing quiet well for the current size, but as they expand they will suffer because they start to get into WOW and Coles territory and they cant compete on price. WOW hasn't been paying attention to MTS because they sort of aim for different market and sort of can live side by side but once you start get into WOW territory you can expect fierce price war and WOW has much bigger war chest to fight.

You can start seeing MTS expansion on liquor and getting into WOW territory and they haven't been doing that well.

MTS has growth prospect but can they command the return from capital invest that is the key question and that what drive their share price down. I think most people don't have confident in them invest a lot of money in expansion then come up against a juggernaut like WOW that could deal them a deadly blow on return on investment.

You see what WOW done to Coles, MTS can expect the same treatment.

Having said I agree MTS trades at a much more attractive price and potential than WOW and like any investment it's not always a sure thing. Sometimes you got your analysis right other time you got it wrong and you got to go with your conviction. 

I actually been following MTS since they trade close to $4.70 and thinking of buying, then I come up with that analysis and decided to sit on the sideline until I can see them go head to head with WOW and Coles.

Cheers


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## Rainmaker2000 (1 February 2008)

*Re: MTS - Metcash*

I like your more conservative analysis ROE and I agree with some of it...maybe that WOW will always have lower cost base and scale....but I don't think its that 'cut and dried'....

For example, I don't see MTS as being similar businesses to WOW and Coles...sure they are in the grocery industry......but MTS pretty much runs a franchise model....its the franchisees were feel the 'business risk' first before the chilly winds get to MTS

For years I've expected Harvey Norman's overpricing to be their downfall once a 'company owned' outfit like a JB hifi or Dick Smith moves in and sqeezes them.....I now don't think that will ever happen because the franchise model just works better than the company owned model......if only cause capitalist incentive is passed down the chain.

More than that, I just don't see MTS as in the same business....as you say, more a convenience retailer.......WOW and Coles under Westfarmer's will go more big box...some of MTS stores are getting bigger but then many are not...MTS is a much more flexible operator

MTS scale is still very significant and I do see them taking more market share.....if only cause they are a smaller, more innovative business...much of their profit is derived from wholesale grocing, with them now being the only major wholesale grocer in Australia

If the stock was above $5 it might be different....MTS business still has a lot going for it, even if WOW and Coles go 'at it'


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## ROE (1 February 2008)

*Re: MTS - Metcash*

I like your analysis good to have you own board to throw around ideas ... market will be going through a yoyo phase for a while so good to throw ideas around


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## dalek (1 February 2008)

*Re: MTS - Metcash*



Rainmaker2000 said:


> I like your more conservative analysis ROE and I agree with some of it...maybe that WOW will always have lower cost base and scale....but I don't think its that 'cut and dried'....
> 
> For example, I don't see MTS as being similar businesses to WOW and Coles...sure they are in the grocery industry......but MTS pretty much runs a franchise model....its the franchisees were feel the 'business risk' first before the chilly winds get to MTS
> 
> ...




Rainmaker, you are correct, MTS sells the same products but they are not in the same business.
Their business model would certainly not be to take on the major big box supermarkets but to exploit the convenience store market position which they are doing pretty well.
With their small footprint stores, obtaining optimum locations is not a huge issue and the franchisee style also encourages and rewards the best store operators.
It is true that for major grocery purchases we will shop at WOW or similar but for convenience we trade off the cheaper prices and go to the local IGA.
While the basket size is smaller so are all the store costs.
In retail it is all about customer expectations and what they will trade off , in this case, lowest price, for convenience and service.
One of the best examples of trading expectations is of course the Aldi group.
No service, appalling store layouts, limited range, but unbeleivably cheap home brand commodity products. Customer numbers through the roof !!!

All of this doesn't guarantee MTS share price success but their model is absolutely sound and in my view relatively insulated from the majors.
I will be watching for SP of around $3.75 during the next dip.


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## chops_a_must (7 October 2008)

*Re: MTS - Metcash*

Well, this was my first proper bottom drawer so far. Had my eye on it for a while.

Bought on the RBA news. It now officially has a higher low and higher high, which in this market is gold.

I like the growth prospects from a conceptual point of view, moreso than coles, and prefer to shop at IGA more than coles and WOW. Will see how it goes.


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## nunthewiser (8 October 2008)

*Re: MTS - Metcash*



chops_a_must said:


> Well, this was my first proper bottom drawer so far. Had my eye on it for a while.
> 
> Bought on the RBA news. It now officially has a higher low and higher high, which in this market is gold.
> 
> I like the growth prospects from a conceptual point of view, moreso than coles, and prefer to shop at IGA more than coles and WOW. Will see how it goes.





... LOL wish id posted the day b4 yesterday so i could of sounded suffisticated ......

solid co , holding fairly strong , im biased 

cheers


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## grace (8 October 2008)

*Re: MTS - Metcash*



nunthewiser said:


> ... LOL wish id posted the day b4 yesterday so i could of sounded suffisticated ......
> 
> solid co , holding fairly strong , im biased
> 
> cheers




This is my grocer stock.  I have held for 18 months I think.  Always kept looking at Woolies, and this one seemed to always be outshined.  Hasn't lost any money over that time though, and paid good divs.

Glad to hear a few of you are buying up.


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## nunthewiser (8 October 2008)

*Re: MTS - Metcash*



grace said:


> This is my grocer stock.  I have held for 18 months I think.  Always kept looking at Woolies, and this one seemed to always be outshined.  Hasn't lost any money over that time though, and paid good divs.
> 
> Glad to hear a few of you are buying up.




ive held since around may o4 , been accumulating along the way and enjoy the fullyfranked divvies also .....lol this is the first time ive looked at this thread since me joining courtesy of chops pointing it out


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## nunthewiser (10 October 2008)

*Re: MTS - Metcash*

Added to MTS holdings today . call me silly . this is an investment co for me so pay no heed if after a quick buck...should point at the volumes pushing it down tho.

cheers 
an accumulating silly nun


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## imajica (1 June 2009)

*Re: MTS - Metcash*

June 01, 2009 

Article from:  Reuters 

GROCERY and liquor merchant Metcash has posted a 2.55 per cent lift in annual net profit and says it expects no weakening in its core grocery market in the months ahead.

Metcash reported net profit of $202.5 million for the year ended April 30, up from $197.4 million in the prior corresponding period.

The wholesaler posted an 8.51 per cent lift in revenue to $11.07 billion.

Metcash said it expects growth in normalised earnings per share (EPS) of between seven and ten per cent in fiscal 2010, subject to unemployment and economic conditions not deteriorating above current government forecasts.

"While the trading environment remains volatile and financial uncertainties continue to negatively impact overall consumer spending, we see no weakening in the core grocery market served by Metcash,'' Metcash said.

Metcash declared a final dividend of 14 cents per share, taking the total dividend for fiscal 2009 to 24 cents.

The company reported a 9.3 per cent lift in wholesale sales for the full year to $10.97 billion, driven by strong consumer support for independent retailers, Metcash said.

"The strong growth was above market guidance and was posted amid volatile economic conditions and continuing strong competition in the supermarket sector,'' it said.

Metcash's key business, IGA Distribution, posted an 11.3 per cent lift in sales and growth in earnings before interest, tax and amortisation (EBITA) of 14.7 per cent to $315.5 million.

Metcash said sales on a comparable store basis rose nine per cent as consumers continued to support the IGA network of around 1270 outlets across Australia.

Chief executive Andrew Reitzer said consumers were eating out less often and shopping more at the supermarkets that Metcash supplies with products.

"More Australians are holidaying in Australia and shopping at the widely dispersed IGA network of independent supermarkets,'' he said.

Australian Liquor Marketers, the company's liquor division, generated sales growth of 5.6 per cent, while EBITA jumped 8.2 per cent to $33.8 million. Metcash said beer volumes were the stand our performer, with 25 per cent sales growth during the year.

Campbells Wholesale, Metcash's specialised convenience distribution division, grew sales by 7.1 per cent and EBITA by 7.8 per cent to $33 million.

Primary category sales of food service, soft drinks and confectionery rose 10.6 per cent, producing higher margins, it said.


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## nunthewiser (10 September 2009)

*Re: MTS - Metcash*

wonders if any of the chartists on the breakout threads will notice this one soon........

i hold and luvvem to bits


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## grace (10 September 2009)

*Re: MTS - Metcash*



nunthewiser said:


> wonders if any of the chartists on the breakout threads will notice this one soon........
> 
> i hold and luvvem to bits




Yes nun, I hold too.  Hasn't it been a champion through all the doom and gloom.   I was wondering when it was going to break up too.


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## Romano (29 November 2009)

*Re: MTS - Metcash*

Interesting move on Mitre 10.  Wonder how that will pan out?
Mitre 10 seem to be carrying a lot of debt.  What will this play do to the Metcash share price i wonder


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## bloomy88 (30 November 2009)

*Re: MTS - Metcash*



Romano said:


> Interesting move on Mitre 10.  Wonder how that will pan out?
> Mitre 10 seem to be carrying a lot of debt.  What will this play do to the Metcash share price i wonder




Yeah it will be interesting, I wonder if Metcash are only making this move to stay in touch with the Woolworths and Wesfarmers...

It seems a bit odd to me because Mitre 10 aren't exactly the stongest competitor in the hardware market and their significant debt makes it a riskier play


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## Rainmaker2000 (30 November 2009)

*Re: MTS - Metcash*

Make no mistake........this is a genius move from Metcash who's growth profile is stalling a little.........

The worries about debt are unfounded as debt is just an aspect of enterprise value.......so it's up to Metcash to calculate the right buy price which I'm sure they are at this stage of consolidation.......

The problem with Woolies buying Mitre 10 was that completely a franchise business.......which is a similar issue they had with Danks, but at least there was a coherent company owned stores aspect of it, as well as a large US companion......

The entry of Woolworths sounded a further deathnell to Mitre 10, who will be picked up for a song by Metcash......and make no mistake, Metcash wants the whole thing.......

The Mitre 10 model is completely consistent with Metcash's model and expertise..........there is an illusion that Mitre 10 stores are not profitable when Mitre 10 still boast some stores of exceptional profitability while others are obviously not..........

Enter the Metcash machine........which has made an artform out of ripping profit margins out of the 'bits and pieces' of the Australian grocerty market...........compared to the inept current Mitre 10, the Metcash branding and store optimisation and scaleability machine will make Mitre 10 a rich margin flow.......this is a killer move from Metcash


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## Romano (30 November 2009)

*Re: MTS - Metcash*

From my knowledge, Mitre 10 stores are ALL individually owned.  Mitre 10 is only a marketing group, that has a wholesale warehouse to supply stores. 
It is exactly the same model as Danks, that has been purchased by Woolies.
These stores are in no way franchised, nor company owned.  Technically, they are not really aligned to Mitre 10 except through their marketing program.  
This is a very interesting play from Metcash.  The Mitre 10 wholesale business would flouder otherwise.


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## Rainmaker2000 (1 December 2009)

*Re: MTS - Metcash*

Agree, Mitre 10 is a pure franchise play which makes it perfect to Metcash........but don't take my word for it.

_But Mr Reitzer said it was for this exact reason that Mitre 10 first signalled it was interested in a takeover proposal. Mitre 10 and one other unknown bidder are currently in the race to secure control of the hardware banner group.

"We are the absolute natural owner of that business, we believe that just as we done a job to be the champion of the independent grocery retailer we think we can do exactly the same job to be the champion of the independent hardware retailer."_

Mitre 10 currently has no idea how to coexist with the wearhouse category killing Bunnings........but that is Metcash artform.....they won't try to be Woolworths or Bunnings.......but they will offer suitably tailored businesses for the 'competitive opportunity' on offer.......and rely on the 'local hero' franchisee to outcompete on service and local knowledge......go you sweet thang


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## McCoy Pauley (2 December 2009)

*Re: MTS - Metcash*



Romano said:


> From my knowledge, Mitre 10 stores are ALL individually owned.  Mitre 10 is only a marketing group, that has a wholesale warehouse to supply stores.
> It is exactly the same model as Danks, that has been purchased by Woolies.
> These stores are in no way franchised, nor company owned.  Technically, they are not really aligned to Mitre 10 except through their marketing program.
> This is a very interesting play from Metcash.  The Mitre 10 wholesale business would flouder otherwise.




If they are not owned by the head company but use the Mitre 10 branding and IP to promote themselves, then chances are the Mitre 10 store operators/owners are franchisees pursuant to the Franchising Code of Conduct.


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## McCoy Pauley (2 December 2009)

*Re: MTS - Metcash*

I noticed that the AFR says that Mitre 10 supplies independent hardware stores.  If they're not a franchise system then they must have a fairly robust advice on the aspects of the franchising code under the Trade Practices Act to make it stick.


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## McCoy Pauley (10 December 2009)

*Re: MTS - Metcash*

Article in today's AFR suggests that the owners of Mitre 10 are close to finalising their decision on whether to accept MTS' offer or the private equity offer.  The AFR speculates that the owners may announce their decision today in favour of MTS.


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## McCoy Pauley (10 December 2009)

*Re: MTS - Metcash*

Metcash gets to buy 50.1% of the Mitre 10 chain for $55 million with an option to buy the remaining 49.9% of Mitre 10 following finalisation of the Mitre 10's audited accounts in either 2012 or 2013.

http://www.theage.com.au/business/mitre-10-seeks-independents-after-metcash-move-20091210-klpm.html


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## Wysiwyg (10 December 2009)

*Re: MTS - Metcash*



Rainmaker2000 said:


> *Mitre 10 currently has no idea how to coexist with the wearhouse category* *killing Bunnings.*.......but that is Metcash artform.....they won't try to be Woolworths or Bunnings.......but they will offer suitably tailored businesses for the 'competitive opportunity' on offer.......and rely on the 'local hero' franchisee to outcompete on service and local knowledge......go you sweet thang



My experience of 2 visits to a Mitre 10 store in Toombul over the last 3 years was they have a huge mark-up on items and the store layout was pre 1990's. :disgust: Big facelift needed but the culture may be ingrained.


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## Romano (12 December 2009)

*Re: MTS - Metcash*



McCoy Pauley said:


> Article in today's AFR suggests that the owners of Mitre 10 are close to finalising their decision on whether to accept MTS' offer or the private equity offer.  The AFR speculates that the owners may announce their decision today in favour of MTS.




The board has recommended that Metcash is their preferred option. 
 Shareholders still have to vote on this.  It is not a done deal yet. The votes will be finalised by the end of March 2010. 

They shareholders still have to be sold on the idea of why they should accept the offer.


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## lukelee (13 March 2010)

*Re: MTS - Metcash*

Mitre 10 votes in favour of acquisition by Metcash:
http://www.asx.com.au/asxpdf/20100312/pdf/31p76hl76lmc3s.pdf

So, do you guys think mts will have a big move next week?


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## So_Cynical (13 March 2010)

*Re: MTS - Metcash*

I'm new to MTS and id like to thank most of the previous posters in this thread for there analysis and thoughts, its been truly helpful thanks all.  I've just spent a few hours going over MTS and have to say im impressed, ill list the highlights below for others that may be new to MTS.


First listed Apr 2005 
Market cap 3.1 Bill
Cash and Cash equivalents 195 Mill (Half year financial Oct 09)
Debt 261 Mill (approx) (Half year financial Oct 09)
No capital raisings since listing (i couldn't find any)
Unbroken history of interim & final FF dividend payments, increasing year on year.
Top 20 hold over 72%
Top 3 (HSBC, NAB, J P Morgan) hold over 50%

I imagine that the ACCC will never allow WOW or WES to take over Metcash and politicly its pretty much impossible, so other than a foreigner coming in and bidding for them, id say they are not in much danger of getting swallowed up or forced outa business. 

Anyway as has been covered previously in this thread MTS is not really a competitor for the big 2 and has a different business model....i reckon the Mitre 10 buy in is a top move as again mitre 10 don't really compete against Bunnings and the Mitre 10 model is a perfect bolt on fit for Metcash.

MTS at its current SP just looks like good buying to me, well its about where i would want to be buying in, at this point in time...although easy to think that with there SP action history i mite get stuck in this trade for quiet a while waiting for my 14% profit target to get hit.


Have a look at the numbers from there 2009 annual report below.

http://www.metcash.com/site_files/s1001/files/Annual_Report_2009_web.pdf

Disclosure i don't hold but am seriously considering...please do your own research etc.
~


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## Pallen (13 March 2010)

*Re: MTS - Metcash*

Hi so cynical, as you say MTS looks very good but IMO some deeper reading and thinking is needed.

It appears to be a very strong, growing stock.

So ask yourself why is the SP & MC not much, much higher. Yields good, full franked too, why has the SP moved sideways.

I started thinking about this questions as I too liked the business model.

After doing some digging I noted Perpetual, a value based investor and begun to sell down it's holding, why would it do that?

Also found this article and I didnt like it, stopped me from investing.



> http://www.franchise.net.au/Article/Come-clean-Franklins-angered-by-Metcash-secrecy/508768.aspx
> 
> *Come clean: Franklins angered by Metcash secrecy*
> *18 December 2009 *
> ...




Structurally, I think it's still in its infancy and has a lot of kinks to be ironed out.

DYOR and good luck.


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## Julia (13 March 2010)

*Re: MTS - Metcash*



Pallen said:


> Hi so cynical, as you say MTS looks very good but IMO some deeper reading and thinking is needed.
> 
> It appears to be a very strong, growing stock.
> 
> So ask yourself why is the SP & MC not much, much higher. Yields good, full franked too, why has the SP moved sideways.



Wow, someone who actually asks the right question:  i.e. your capital is essentially not growing.

Goodonya, pallen.


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## Pallen (13 March 2010)

*Re: MTS - Metcash*

Isnt that what we're all here for, capital growth?

I too like the business model, but the reasons I have posted above I feel the market is no too impressed, perhaps when the Franklins case is adjourned I'll take another peak.


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## So_Cynical (14 March 2010)

*Re: MTS - Metcash*



Pallen said:


> Hi so cynical, as you say MTS looks very good but IMO some deeper reading and thinking is needed.
> 
> It appears to be a very strong, growing stock.
> 
> ...




Hi Pallen thanks for posting...always good to get a bit of discussion going.

While looking though all the Metcash announcements i couldn't help but notice that there's alot of institutions buying and selling at all share price levels...sorta makes sense as there all major holders of MTS shares.

Now i know these guys are finance professionals and very well educated and paid etc etc..but im of the opinion that there pretty much fumbling around in the dark like we are, just making reasons to justify there actions and having 1 hour weekly meetings about it and writing reports.

To demonstrate this ive spent a little time recording the times PPT has announced becoming and ceasing to be a substantial holder of MTS stock..and have marked up a all data weekly chart with PPT's buying and selling activity.

I would be interested if you or anyone else can make sense of it....i cant. :cuckoo:
~


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## So_Cynical (14 March 2010)

*Re: MTS - Metcash*



Pallen said:


> I too like the business model, but the reasons I have posted above I feel the market is no too impressed, perhaps when the Franklins case is adjourned I'll take another peak.




This is a simple little business dispute and probably nothing will come of it...at least that's Metcashes view according to this announcement from last year.



			
				Metcash announcement said:
			
		

> Metcash is firmly of the view that there will be no material financial consequences arising from the decision




The announcment explains Metcashes position..makes sense to me.

http://www.metcash.com/site_files/s...ies_position_regarding_Franklins_judgment.pdf


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## Julia (14 March 2010)

*Re: MTS - Metcash*



So_Cynical said:


> MTS at its current SP just looks like good buying to me, well its about where i would want to be buying in, at this point in time...although easy to think that with there SP action history i mite get stuck in this trade for quiet a while waiting for my 14% profit target to get hit.




Is there any particular reason for your profit target to be 14%, So Cynical?
Do you use this, or a similar level of profit, across your p/f to exit?


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## So_Cynical (14 March 2010)

*Re: MTS - Metcash*



Julia said:


> Is there any particular reason for your profit target to be 14%, So Cynical?
> Do you use this, or a similar level of profit, across your p/f to exit?




14% to 16% is the ideal first exit as it gives me the ideal (in my mind) mix of approx 40% free carry and 60% of my money to go forward as a long term hold...also im aware that without a stop etc im vulnerable and always keen to exit the trade ASAP and reduce my risk and move on to the next stock, building my portfolio and dividend stream.

So a typical entry for me is 5k, planning to profit take once the SP has risen about 14 - 16% selling enough of the stock to return to me about 4K leaving 1K of my money (original capital) and the 14% profit which is about $700 ~ $800 so leaving me with a small holding of about $1800 value and 4K of my original 5K back to recycle into the next stock or re-entry.

That's what ive been doing over the last 12 months and have accumulated a nice little mix of stocks..on a few occasions the stock has continued to fall after my first entry so i would typically add another $1500 or $2000 once the SP has fallen about 12% and i would then use that as a new base for the whole position, and lower my target on the first trade to 11 or 12% to achieve a similar outcome. (for tax purposes keeping all the stock from the lower entry and selling the bulk of the first entry)

I don't use leverage or margin, and will, and have added to my holdings on dips using the same entry amount but only leaving 500 or so of my capital in on subsequent re-entry into a stock already held.

That's the guts of the money management side of my trading/investment plan...i know its far from perfect but have to say when coupled with my stock selection skills and this market we are in (sideways bear) im doing really well...my longer term goal is to build a P/F of mostly dividend paying stocks (almost finished) that i have established substantial free carry positions in ...i intend to let the next bull take care of the bulk of the capital growth side of things.


----------



## Julia (14 March 2010)

*Re: MTS - Metcash*

So you will exit when you have a profit of 14% - 16% even if the SP is still rising?

Seems like a lot of activity, chopping and changing, for a pretty small reward.

Do you ever just let your profit run on?


----------



## So_Cynical (14 March 2010)

*Re: MTS - Metcash*



Julia said:


> So you will exit when you have a profit of 14% - 16% even if the SP is still rising?
> 
> Seems like a lot of activity, chopping and changing, for a pretty small reward.
> 
> Do you ever just let your profit run on?




I'm still exposed to the rising SP and the divis, and some of those stocks have gone on to more than double in value...the reward is somewhat small but when duplicated and added to with re-entry's it all adds up, keeping in mind im doing this because im not a millionaire....cos if i was id be on a Filipino beach getting a coconut oil work out not sitting in front of a screen. 

Also while ill admit im a gambler..im very much a conservative, risk adverse gambler...as for letting my profits run, after a post of yours many months ago i decided to experiment with just that and turns out the next stock i brought was HDF @ 0.84 (now over 1.20) and im yet to take a profit from it and loving the dividend stream.  Thanks Julia.


----------



## JTLP (14 March 2010)

*Re: MTS - Metcash*

Quick question ladies and gents:

What is the FF divi for MTS?

Also a thought...would MTS pursue a significant interest in Mitre 10 if they believed the Franklins debacle would be costly???


----------



## So_Cynical (14 March 2010)

*Re: MTS - Metcash*



JTLP said:


> Quick question ladies and gents:
> 
> What is the FF divi for MTS?
> 
> Also a thought...would MTS pursue a significant interest in Mitre 10 if they believed the Franklins debacle would be costly???




Hey JTLP

FF = Fully Franked so you add 30% to get the gross yield, and the Mitre 10 buy in is only 50 something million so not like its much money compared to the potential upside...the Franklin's thing is a nothing IMO.

I think ill kill my PRY buy order and have a go at MTS..i had a nice walk and a good think about it this afternoon and the more i think about MTS the more i like it.


----------



## Julia (14 March 2010)

*Re: MTS - Metcash*



So_Cynical said:


> I'm still exposed to the rising SP and the divis, and some of those stocks have gone on to more than double in value...the reward is somewhat small but when duplicated and added to with re-entry's it all adds up, keeping in mind im doing this because im not a millionaire....cos if i was id be on a Filipino beach getting a coconut oil work out not sitting in front of a screen.



Sure, but I guess we're discussing the best ways to get to sitting on that beach.



> ..as for letting my profits run, after a post of yours many months ago i decided to experiment with just that and turns out the next stock i brought was HDF @ 0.84 (now over 1.20) and im yet to take a profit from it and loving the dividend stream.  Thanks Julia.



Nice to hear.  When did you buy it at 0.84?  Have just had a look at the chart and it's been there twice on the way up and once on the way down in the last year.  

So do you think you might be on the way to being a convert to the "let your profits run" philosophy?


----------



## JTLP (15 March 2010)

*Re: MTS - Metcash*



Julia said:


> Sure, but I guess we're discussing the best ways to get to sitting on that beach.
> 
> 
> Nice to hear.  When did you buy it at 0.84?  Have just had a look at the chart and it's been there twice on the way up and once on the way down in the last year.
> ...




Julia probably not the best place to be asking but when do you know to sell your running profits? At first turn of price? Just curious!

Also So_Cynical; thanks for that info. Do you know how much the divi was last year?


----------



## So_Cynical (15 March 2010)

*Re: MTS - Metcash*



Julia said:


> When did you buy it at 0.84?  Have just had a look at the chart and it's been there twice on the way up and once on the way down in the last year.




The last dip in August 



Julia said:


> So do you think you might be on the way to being a convert to the "let your profits run" philosophy?




Now that my portfolio is about full, ill soon be just concentrating on re-entry's into my portfolio stocks so would make sense to lets the profits run a little.

Anyway back on thread topic...ive got a buy in on MTS @ 4.04 prob run away from me now.



JTLP said:


> Also So_Cynical; thanks for that info. Do you know how much the divi was last year?




The last 2 divis factored forward would be 0.325 Thirty two and a half cents gross per share, so at 4.05 that's a gross yield of around 8% if the divi holds at current levels..but it has gone up every year for the last 5 so :dunno:


----------



## ers_6 (17 March 2010)

*Re: MTS - Metcash*



So_Cynical said:


> The last dip in August
> 
> 
> 
> ...




do you think the 4.04 is likely?
I bought in at 4.35 thinking a good trade and considering re-entry if it keeps going south. 

such a strong company with good growth prospects i dont want to exit unless i need to.


----------



## So_Cynical (17 March 2010)

*Re: MTS - Metcash*



ers_6 said:


> do you think the 4.04 is likely?
> I bought in at 4.35 thinking a good trade and considering re-entry if it keeps going south.
> 
> such a strong company with good growth prospects i dont want to exit unless i need to.




Well on Monday and Tuesday i didn't get filled so moved on today after GNS fell further yesterday...Good luck to the MTS holders, its a bit of i shame i missed out on this at such a great price.


----------



## lukelee (18 May 2010)

*Re: MTS - Metcash*

Change in substantial holding - NAB
Does this news effect the price?
The price is 4:00 today. I think it is a good price to enter, what do you think?


----------



## So_Cynical (18 May 2010)

*Re: MTS - Metcash*



lukelee said:


> Change in substantial holding - NAB
> Does this news effect the price?
> The price is 4:00 today. I think it is a good price to enter, what do you think?




$4 is better than $4.10 or $4.30 but then some are scared of a falling or stagnant SP...when pretty much the whole market has fallen the bargain hunters are spoil for choice so stocks like MTS can and do get passed over.

Personally i think Cosco can hurt Metcash a little in Melb and Syd, plus there's probably not much organic growth potential in other areas...on the upside not much opposition outside of Melb and Syd and high barriers to new entry's and the new Mitre10 deal.

MTS has slipped to 3 or 4 on my buy list.


----------



## lukelee (18 May 2010)

*Re: MTS - Metcash*

Thanks, but why does MTS pay out almost all of its profits to shareholders? MTS has a really good dividend


----------



## TheBull (1 June 2010)

*Re: MTS - Metcash*

2010 results are out nice little result IMHO. FF Div of 15c, EBITDA, Rev, NPAT all up with 2011 outlook quite positive as well.

Can't post the ASX link as I am such a newb and I do not have 5 posts yet.. 

I am a holder of MTS.


----------



## lukelee (7 June 2010)

*Re: MTS - Metcash*

On the recent 2010 preliminary final results, the revenue is $11,608.1, the Cost of sales is $10,435.3, it is almost 90%, why it is so high? woolworth is only 74%. where is all the money going?


----------



## It's Snake Pliskin (28 July 2010)

*Re: MTS - Metcash*

Just wondering what the main fundamental threats to MTS are. How do these threats affect the performance of the business and the result on share price historically? 
I note technically it is popping up today.


----------



## Mofra (21 October 2010)

*Re: MTS - Metcash*



lukelee said:


> On the recent 2010 preliminary final results, the revenue is $11,608.1, the Cost of sales is $10,435.3, it is almost 90%, why it is so high? woolworth is only 74%. where is all the money going?



COS/COGS isn't the best measure to determine effective management IMO - it is merely the accounting practice of adding the inventory value at the beginning of the reporting period (RP) to the cost of inventory acquired during the RP and taking off the value of inventory at the end of the reporting period. 
Could be anything added into COGS including orders brought forward due to pricing issues (bargains!). I hold WOW & WES and am looking at MTS for a LT purchase.

11 straight years of increased profits means it wont be a bolter but should reward the patient investor over time.


----------



## ck13488 (15 November 2010)

*Re: MTS - Metcash*

does anyone have any reasons for the gains since the start of the month? 
up ~5% this month while the asx200 has been flat.

all i can find is this reference which gives little insight/info, seems to me like a broad assumption
"Shares in Australian grocery and liquor wholesaler Metcash Ltd. (AU:MTS  4.53, +0.02, +0.44%)  rose as investors sought to uncover additional potential targets amid heightened buyout activity" market watch

i bought this stock before i knew how little i know


----------



## skc (15 November 2010)

*Re: MTS - Metcash*



ck13488 said:


> does anyone have any reasons for the gains since the start of the month?
> up ~5% this month while the asx200 has been flat.
> 
> all i can find is this reference which gives little insight/info, seems to me like a broad assumption
> ...




Perhaps you should look for information a little bit more current than the link (which didn't work btw). 



> Asia Markets
> 
> Nov. 23, *2006,* 8:08 a.m. EST
> 
> Takeover talk lifts Sydney; region rises




http://www.marketwatch.com/story/takeover-talk-lifts-sydney-new-records-set-regionwide


----------



## lukelee (6 December 2010)

*Re: MTS - Metcash*

Just a quick question:
why do they say "metcash is sole monopoly wholesaler of package goods to independent retailers"?
where does woolworth and coles import their stocks?  Do they import from metcash? if not, how could metcash be the "sole monopoly wholesaler of package goods to independent retailers. "?


----------



## Julia (6 December 2010)

*Re: MTS - Metcash*

WOW and Coles act as their own wholesalers.  Put simply, they are big enough.
They deal direct with suppliers.
The small independent retailers don't have the money or the clout to do this.


----------



## skc (6 December 2010)

*Re: MTS - Metcash*



Julia said:


> WOW and Coles act as their own wholesalers.  Put simply, they are big enough.
> They deal direct with suppliers.
> The small independent retailers don't have the money or the clout to do this.




Small independents can't buy their wholesale supplies from WOW / Coles for obvious reasons. However, some suppliers can do the distribution themselves. E.g. Coke and Fosters etc have their own distribution. 

So in one sense if MTS was to get too thick a margin on their wholesale operation, the larger suppliers will probably step in and mitigate that to some extent.


----------



## lukelee (7 December 2010)

*Re: MTS - Metcash*

Thanks guys.
Does this mean except woolworth and coles and their service station etc. All the milk bars, convenient stores, small super market, 7-11, small restaurants ... import from metcash?


----------



## YELNATS (7 December 2010)

*Re: MTS - Metcash*



lukelee said:


> Thanks guys.
> Does this mean except woolworth and coles and their service station etc. All the milk bars, convenient stores, small super market, 7-11, small restaurants ... import from metcash?




My understanding is that all the IGA's (Independent Grocers Australia) you see around the town source most of their supplies from Metcash. IGA's are independent grocers franchised by Metcash. I believe Metcash also supply some other independent (non-IGA) retailers too.


----------



## skc (7 December 2010)

*Re: MTS - Metcash*



lukelee said:


> Thanks guys.
> Does this mean except woolworth and coles and their service station etc. All the milk bars, convenient stores, small super market, 7-11, small restaurants ... import from metcash?




Not sure about restaurants... many of the small ones probably just walk into the supermarket or fish market etc to source their ingredients.

There are probably also further intermediaries like buying groups that sit between the corner shop and MTS...


----------



## YELNATS (7 December 2010)

*Re: MTS - Metcash*



skc said:


> Not sure about restaurants... many of the small ones probably just walk into the supermarket or fish market etc to source their ingredients.
> 
> There are probably also further intermediaries like buying groups that sit between the corner shop and MTS...




Most restaurants are supplied by "foodservice" companies such as R.M. Smith at wholesale prices, rather than pay retail - fish and meat supplies may be an exception for smaller restaurants. Some of the big food manufacturers, eg. Nestles, where I used to work, have their own foodservice divisions supplying restaurants and institutions such as hospitals, prisons, etc.


----------



## JTLP (23 February 2011)

*Re: MTS - Metcash*

Where's So_Cynical when you need him?

Wanted some opinions on the range of the MTS chart for the year - between $3.90 and about $4.50.

10% gain achievable (if it sticks to the range) and a yield of 6.3% for divvie.


----------



## JTLP (30 June 2012)

*Re: MTS - Metcash*

MTS given a fair old whacking for a mixture of dollar raising, costs incurred and just general ho hum!

Was it deserved? You'd think so - and they seem pretty intent on more acquistions? My guess is that the current price squeeze from Coles and Woolworths is putting the pinch on Metcash - and in order to grow they need to buy...

Thoughts?


----------



## qldfrog (11 July 2012)

*Re: MTS - Metcash*

Current SPP 
retail can get share at 3.335 including  the final dividend or 6.5% discount to avg price;
expected final dividend:16.5c so priced at 3.335-0.165=3.17 per share

current share price 3.19 
What would you do?


----------



## Tannin (15 July 2012)

*Re: MTS - Metcash*



JTLP said:


> MTS given a fair old whacking for a mixture of dollar raising, costs incurred and just general ho hum!
> 
> Was it deserved? You'd think so - and they seem pretty intent on more acquistions? My guess is that the current price squeeze from Coles and Woolworths is putting the pinch on Metcash - and in order to grow they need to buy...
> 
> Thoughts?




Well, first, Metcash has been dealing with the Wollies/Coles squeeze for many, many years. I can never quite work out how they do it, but their record speaks for itself. 

Counter to that, the current phoney price war between Coles and Woollies has gathered significant public mindshare and it is biting. (I say "phoney price war" because the Coles strategy has been to make spectacular cuts to things like milk and bread but balance those very public cuts with sneaky increases in almost everything else, _and_ at the same time squeeze the farmers and suppliers 'till their noses bleed. Notice that, at least on the latest figures I have seen, Coles gross margin on items sold has gone UP, not down. Very smart marketing there.) But it would not do to overestimate the effect of the war. It's not all that far from business as usual, and Metcash is fighting back with its own campaigns.  So count it as a factor but do not get carried away with it.

Metcash can't see much organic growth in the next few years. Like Wollies and Coles, Metcash reckon that the Australian market has plenty of supermarkets already and the only way for them to expand much is to diversify. All three have already done that with liquour and hardware and (for the two majors) petrol and even banking and insurance. Metcash has found its own answer with the car parts business (a very smart buy in my view) and also with their upcoming undisclosed $90 million purchase. (Well, we hope that one is as smart a move as the car parts one was - we will have to wait and see.)

The Mitre-10 purchase (they already owned half) makes sense. It is returning decent profits, so why not have more of it? And having a hardware chain can be seen these days as a necessary defensive asset if you want to sell groceries. Woollies certainly see it that way - look at the vast sums they are pouring into their Masters adventure.

The last main factor I'm going to consider is the regulatory environment. On the plus side, things could get a bit fairer. Some of the worst of the anti-competitive Colesworth real estate rorts have been clamped down on. Also on the plus side, the big two are very much on the nose in regulation-land - the Greens and about half the Labour Party are alarmed at the consumer effects of their nastier monopolistic practices and want to take action, the National Party is even more alarmed because of their evisceration of the supply chain (count the Greens in on this one too); only the Liberals are still stuck in let-'er-rip mode. On the minus side, politicians practically never actually _do_ anything, and the government body responsible for actually taking action, the ACCC, has a shameful history of bending over and taking it from Colesworths (this is how we got to an 85% duopoly problem in the first place, remember, gutless inaction from the ACCC) and (apparently) an unexplained down on the only serious candidate to shake the duopoly up (Metcash) - look at their absurd and costly stance which led to the Franklins court debacle. Overall, call the regulatory environment even, neither good news nor bad for Metcash.




qldfrog said:


> current share price 3.19  What would you do?




I see a solid company with some relatively minor problems and growing pains being sold for 20% less than fair value. It has good prospects and lower risk than a lot of things most of us invest in. Back when it was 4.00 or so I often thought about buying some as a dividend stock, but always wound up getting something else instead. But when it dropped to not much over $3.00 it became compelling value. I bought in at about $3.20. The way I see it, it's an excellent chance to go back up to somewhere around the $4.00 mark in perhaps a year or two, and if it does I have a very nice little capital gain. And if it doesn't, well, I still have my $3.20 and I've been paid three or four very nice fat fully-franked dividends. The risk that Metcash will just go down and down and leave me out of pocket is there, of course, same as with any company, but it seems to me to be quite a small and manageable risk to set against a double-chance benefit of fat dividends and capital growth. I only bought a modest parcel but if I can find some spare cash lying around I might get a bit more.


----------



## notting (15 July 2012)

*Re: MTS - Metcash*

I thought the reason WOW got into the hardware area was to create a strategic squeeze.  Bunnings success has enabled WES to leverage against it and flog WOW in the supermarket area.  
Hence the Metcash copy cat strategy seemed stupid. The CEO even said, well the others are doing it so we are too
Not strategic just copying because it looks like the thing to do.:silly:
But if MTS really did take out the rest of M10 because it was actually a really good acquisition then that's great.  
Hard to believe however given the amount of competition coming on.
By the way I went to one of the Woolies new hardware things and the service was incredible and it was warm!!
I almost wanted to ask for a job there.  Love toy shops!
Is the retail offer underwritten because no one is going to take it up given MTS is trading below it.
Disclaimer, I have been buying it.  I think people will still have to eat.


----------



## tinhat (15 July 2012)

*Re: MTS - Metcash*

I'm putting MTS onto my watch list. I'll go back and read this thread from start later today. One thing I know about Metcash is that there is something about how they do their accounts that some analysts don't like. For example, I know that Lincoln Stock Doctor don't give MTS a financial health rating (which is the heart of what Stock Doctor is about - fundamental analysis of balance sheets) because of some anomaly with their accounts. That's all I can remember. Will go and do my homework. Yield is certainly attractive. Interesting to see a "defensive" income stock getting beaten down in the current environment.


----------



## qldfrog (15 July 2012)

*Re: MTS - Metcash*

ended up applying for half the max..will seee how it goes,
It seems cheap but that would not be the first time I say that to be proven wrong; the positive is that institutions did get much more at a higher price so maybe a good sign for retail..
time will tell


----------



## JTLP (21 November 2012)

*Re: MTS - Metcash*

At current price ($3.48) MTS is yielding 8%. Seems to be stuck in that band of $3.40 - $3.60 atm.

I would love to see how the M10 full acquisition sits on the books - I fear these smaller type guys getting pushed out by WES and WOW hardware stores.

Thoughts from other observers?


----------



## skc (21 November 2012)

*Re: MTS - Metcash*



JTLP said:


> At current price ($3.48) MTS is yielding 8%. Seems to be stuck in that band of $3.40 - $3.60 atm.
> 
> I would love to see how the M10 full acquisition sits on the books - I fear these smaller type guys getting pushed out by WES and WOW hardware stores.
> 
> Thoughts from other observers?




Looks good on yield but I don't remember the last time I shopped at an IGA. Whether it's their shop layout, the discounts on offer or whatever, they just don't entice me to enter their shop.


----------



## kid hustlr (21 November 2012)

*Re: MTS - Metcash*



skc said:


> Looks good on yield but I don't remember the last time I shopped at an IGA. Whether it's their shop layout, the discounts on offer or whatever, they just don't entice me to enter their shop.




I think its the lighting.

I was in one yesterday and it just felt seedy


----------



## skc (21 November 2012)

*Re: MTS - Metcash*



kid hustlr said:


> I think its the lighting.
> 
> I was in one yesterday and it just felt seedy




You know what I think you nailed it!

It would be hilarious if MTS management read this and improve their lighting and achieve 15% sales growth


----------



## JTLP (21 November 2012)

*Re: MTS - Metcash*

Fair points indeed!

MTS always seems to hang around there...guess we can see where it is heading in 2 weeks when HY results are due.


----------



## prawn_86 (21 November 2012)

*Re: MTS - Metcash*

We only shop at an IGa for the odd bits and peices that we have ran out of, purely due to the fact that it is the closest 'convenience store' and within walking distance


----------



## Julia (21 November 2012)

*Re: MTS - Metcash*



kid hustlr said:


> I think its the lighting.
> 
> I was in one yesterday and it just felt seedy



The local Supa Iga has just been renovated.  It still utterly misses the mark.
It's like Aldi - looks cheap and nasty.  Old fashioned presentation and signage.
Staff are really good, but oh, the prices of fruit and veg:  in many cases they are double those of Coles and Woolworths.


----------



## ROE (16 May 2013)

*Re: MTS - Metcash*

These guys looking to get into car parts and car services and sell out fresh food ?? 
Coles and Woolies must be giving them a hard time that they has to look at investing 
automobile business....

the lastest purchase I dont know, car parts are low margin high competitive business...

are they desperate to look for other revenue? their grocery wont be going any where with
the 2 supermarket giants on their tails..

Look at super cheap auto, they are a dog for years in car parts until they expand into outdoor (BCF)
and rebel sports...


----------



## coolcup (30 May 2013)

*Re: MTS - Metcash*

Technicals appear bearish - the stock looks like it is about to complete a long term descending triangle formation





Fundamentals though appear quite supportive on a 12x P/E and 10% dividend yield grossed up for franking. Also the stock is at the largest discount to WOW & WES on a P/E basis for the past 4 years.




On balance, I think the near term outlook is grim if it fails support at $3.75.


----------



## coolcup (3 June 2013)

*Re: MTS - Metcash*



coolcup said:


> Technicals appear bearish - the stock looks like it is about to complete a long term descending triangle formation
> 
> View attachment 52513
> 
> ...




The stock is testing the $3.75 primary support level. Watch out if it fails here!!


----------



## skc (3 June 2013)

*Re: MTS - Metcash*



coolcup said:


> The stock is testing the $3.75 primary support level. Watch out if it fails here!!




MTS is reporting in 3 weeks so it'd be a battle between those who fear the continued market share decline of IGA, vs those who drool over the prospect of 7.5% dividend yield.

My guess is that it will bounce well at $3.75 for a few days before drifting directionless into the reporting date.


----------



## coolcup (4 June 2013)

*Re: MTS - Metcash*



skc said:


> MTS is reporting in 3 weeks so it'd be a battle between those who fear the continued market share decline of IGA, vs those who drool over the prospect of 7.5% dividend yield.
> 
> My guess is that it will bounce well at $3.75 for a few days before drifting directionless into the reporting date.




I don't disagree with this. I think it needs more newsflow to get out of the $3.75 - $4.00 range.


----------



## Letts (24 June 2013)

*Re: MTS - Metcash*

Solid growth so far today, I think I jumped on a bit late to fully maximise any profits though.


----------



## coolcup (24 June 2013)

*Re: MTS - Metcash*



Letts said:


> Solid growth so far today, I think I jumped on a bit late to fully maximise any profits though.




My take was the rally today was relief there was no underlying downgrade in the result and proof the stock was very oversold from a fundamental perspective (double digit grossed up yield and close to single digit P/E). The outlook for growth doesn't look great though with the company's grocery operations mashed between the deep discounting by the majors (Coles, Woolworths) and the Aldi's / Costco's lower cost / lower variety models. New CEO does bring scope for some cost out but there is always a limit on how much this can actually bring. The new ad / branding campaign gives me more of a sense of what IGA stands for but it doesn't really fill me with a reason why hordes of people will go there. Still bearish, albeit the bounce could be sustained on the back of broker notes reiterating price targets well above the trading price.


----------



## chops_a_must (24 June 2013)

*Re: MTS - Metcash*

I still think this may head to long term support below. 

But it has been a good dividend stock, so who knows?


----------



## rbgmauq (24 June 2013)

*Re: MTS - Metcash*

MTS has been showing support 3.41 and resistance in the 3.935 price range. It is upgraded to a buy with the 4.596 target price in six months.

For detail analysis, see here: http://au.stoxline.com/q_au.php?symbol=mts&c=ax


----------



## McCoy Pauley (28 August 2013)

*Re: MTS - Metcash*

BOOM~! there drops the share price after MTS revealed a fall in EPS of up to 9% for the current financial year at the AGM today (according to the Age).  Share price fell almost 6% by the end of today's trading.

http://www.theage.com.au/business/e...unges-on-profit-downgrade-20130828-2sqao.html


----------



## So_Cynical (28 August 2013)

*Re: MTS - Metcash*



McCoy Pauley said:


> BOOM~! there drops the share price after MTS revealed a fall in EPS of up to 9% for the current financial year at the AGM today (according to the Age).  Share price fell almost 6% by the end of today's trading.
> 
> http://www.theage.com.au/business/e...unges-on-profit-downgrade-20130828-2sqao.html




Metcash is a little fish, the only fish in a little sea with 2 big sharks....not a happy place to be a little fish.

Its hard to see many/any positives for them.


----------



## skc (28 August 2013)

*Re: MTS - Metcash*



McCoy Pauley said:


> BOOM~! there drops the share price after MTS revealed a fall in EPS of up to 9% for the current financial year at the AGM today (according to the Age).  Share price fell almost 6% by the end of today's trading.
> 
> http://www.theage.com.au/business/e...unges-on-profit-downgrade-20130828-2sqao.html




I like how they buried the downgrade deep in the AGM presentation. Managed to do a short trade upon resumption that turned my day from meh to fruitful


----------



## SeekingYields (2 September 2013)

*Re: MTS - Metcash*

I'm unfortunately sitting on them at an average of ~$3.45

But I have always taken a long term view for them with a decent dividend yield. So I will sit tight.


----------



## ROE (2 September 2013)

*Re: MTS - Metcash*

At the current price I think the market don't expect much from MTS, so I say the upside is better than down side...so the market know between 7-9% EPS decline and being a fairly stable cash flow business it wont have much surprise on the down side....Yield can take away some of the pain....

sound like TLS not long ago so if they can reinvent and restructure a bit could be a decent return from here..

you are 20c down I wouldn't worry too much about it if you happy with the yield ...it aint mining stock it wont drop off the cliff
probably dripping between $3.00 - $3.30 until the next update


----------



## SeekingYields (1 November 2013)

*Re: MTS - Metcash*

Very good week for Metcash and after buying up when they hit the low 3.20's I have basically recouped all my unrealised losses on my entire holding. Still believe it is a good long term bet.


----------



## Ijustnewit (30 November 2013)

*Re: MTS - Metcash*

Metcash down to $3.05 this week , 28% down on a 52 week roll . Oh dear , lucky the dividends are not too bad . Long term outlook surely can't be that bad given these guys are the third largest suppliers to supermarkets after Coles & Woolies.


----------



## Garpal Gumnut (30 November 2013)

*Re: MTS - Metcash*



Ijustnewit said:


> Metcash down to $3.05 this week , 28% down on a 52 week roll . Oh dear , lucky the dividends are not too bad . Long term outlook surely can't be that bad given these guys are the third largest suppliers to supermarkets after Coles & Woolies.




I don't know about that.

This stock over 5 years has caused grief for investors. 

A high div cannot excuse a price rout.

Can it go lower than high $2 ?






gg


----------



## piggybank (30 November 2013)

*Re: MTS - Metcash*

Agree it's looking very bearish atm.


----------



## Ijustnewit (2 December 2013)

*Re: MTS - Metcash*

MTS Metcash , Metcash net profit up 21pc to $98.9m in first half. Up around $0.20 cents today . Around 6.6 %.
Also reinstating their dividend reinvestment plan due to shareholder demand.


----------



## Gringotts Bank (2 December 2013)

*Re: MTS - Metcash*

Trendline cross.


----------



## Garpal Gumnut (2 December 2013)

*Re: MTS - Metcash*



Ijustnewit said:


> MTS Metcash , Metcash net profit up 21pc to $98.9m in first half. Up around $0.20 cents today . Around 6.6 %.
> Also reinstating their dividend reinvestment plan due to shareholder demand.




Could be the turnaround, many have awaited.

MTS would need to move up beyond $3.50 with good volume for me to be involved 

gg


----------



## skc (21 March 2014)

*Re: MTS - Metcash*

Another update... another downgrade.

Profits for FY14 will be 13-15% below last year, while the previous guidance was high single digit fall.

Share price now at ~9 year low.

Is MTS business totally broken? Can it be saved? The presentation today contains, imo, logical but "perdestrian" strategies. The "price match" approach is going to be expensive and unlikely to go anywhere. The local ranging strategy will probably increase costs and complexity. It may increase foot traffic (if there's really something I can only get from IGA and not Woolies down the road) but I am sceptical about it increasing basket size.

They want to invest $600m to refreash their stores and systems, but is that enough to fight the two behemoths in Woolies and Coles? The large capex spending plan which I think will just see them standing still (at best) rather than returning to growth. 

Dividend payout is cut to 60% to support the capex spend, which probably means something like 12-14cps for the next year or two. So investors are asked to accept yield ~4.5% whilst bearing the risk of execution and further deterioration in sales. Not an awesome proposition imo.

I'd like to see a strong 3rd force in grocery retailing in Australia... but I am guessing that will be ALDI rather than Metcash. ALDI has some truely differentiated offers and makes it a decent destination shop on occassions. It's market position is clear...while MTS wants to turn IGA into those fancy market-style-Coles-look-alike, without the volume to support the fitout.


----------



## VSntchr (21 March 2014)

*Re: MTS - Metcash*



skc said:


> Another update... another downgrade.
> 
> Profits for FY14 will be 13-15% below last year, while the previous guidance was high single digit fall.
> 
> ...




I agree with what you have said.
Reading the presentation gives me the feeling that those in charge feel it is somewhat of their duty (and it is), to fight off the big 2 and provide a competitive offering...and as much as I want them to do it...I can't help but get the feeling its going to be like throwing money on a fire to try and put it out...

The strategies look good but I just don't know if they will be able to pull off the whole "local region" vibe on a national scale...and if they can..as you said, its going to be complicated and complicated = $$.

I was watching for a short but never pulled the trigger, just


----------



## ROE (21 March 2014)

*Re: MTS - Metcash*

I am fairly impressed with the presentation, they sure hell put a lot of work into it..

man if they can execute as well as the presentation this stock could be a bargain.

The risk lies in execution and if it works or not...Yield still doesn't look too bad after today price even with a cut

It is a do or die I think .... get this plan working price can go up 50% and beyond else it be market dog for years to come...


----------



## Knobby22 (21 March 2014)

*Re: MTS - Metcash*

They're up against Aldi too. It's getting tough out there.


----------



## Ves (21 March 2014)

*Re: MTS - Metcash*



ROE said:


> I am fairly impressed with the presentation, they sure hell put a lot of work into it..
> 
> man if they can execute as well as the presentation this stock could be a bargain.
> 
> ...



Hi ROE

Completely agree with you.    The presentation and plan was pretty good,   much better than accepting that you are a mature company,  and doing nothing.   They have realised they are at a critical point and need to act.  Their actions will speak louder than words, of course. 

If they can fix their cost structure, they have $13B of revenue to capitalise on.  Whilst the risks at the moment are fairly well balanced between the upside and the downside,   there may be a time for patient investors to pick up this company at an attractive price some time in the future.

The current market price at $400m  EBIT (which is roughly the forecast) is not overly expensive,   but it does leave room for capital destruction if that base is further eroded.    

As Buffett says,  you don't always need to swing.  But that being said there is no harm in watching from the sides lines until it you see something you can hit.


----------



## notting (21 March 2014)

*Re: MTS - Metcash*

MTS reminds me of a one of those little stubborn houses that have refused to sell whilst having two sky scrappers being built on both sides of it.
Having said that, today's price action was compelling may be worth a punt with a stop just below today's low.
Whatch how it handles the gap for a hint of the possible strength in any upswing.


----------



## Ijustnewit (22 March 2014)

*Re: MTS - Metcash*

I have held this guys for very long time , and probably will hold out at this stage . But if we ever see around the $3.20 mark again I think I will be gone. 
The news hasn't set well with the market , probably has more to do with the 60 % dividend payout ratio reduction than overall "Project Diamond " transformation plans itself. I do think personally it might have been oversold and people do have short memories. Next week the focus will be on some other companies bad news and heat will come off.


----------



## Smurf1976 (22 March 2014)

*Re: MTS - Metcash*

Whilst I agree that Aldi is a competitor of sorts, that is really only true in the big cities and even there it's only in some areas. 

For the rest of the country, the choice is Coles, Woolies or IGA (Metcash). Indeed there are plenty of places where the only nearby competitor to IGA is one of the big two, not both. 

So I can see a future for MTS if they manage to pull off the transformation.


----------



## piggybank (22 March 2014)

*Re: MTS - Metcash*

It is presently just sitting on the 50% Fib of the up leg from early 2001 to mid 2007.


----------



## piggybank (1 December 2014)

*Re: MTS - Metcash*



Smurf1976 said:


> So I can see a future for MTS if they manage to pull off the transformation.




Well judging by the 1H15 results announced to the market today - and the response from the market - there is still have a long way to go yet. Only last week CBA increased their voting power by 1%, so I would imagine there will be a few members of staff looking over theirs shoulders to see if Ian Narev is their to tell them there is no need to come back in the New Year!!

Btw, the stock was down by 15% on the day - hasn't been this low since 2004. For those who thought well after a drop like that the yield will be even better, sorry but amid today's report the dividend is being reduced from 9c to 6c (30%+)


​


----------



## mdkb (3 December 2014)

*Metcash ASX:MTS  heading up*

wondered what peoples thoughts are on this stock right now.


----------



## piggybank (3 December 2014)

*Re: Metcash ASX:MTS  heading up*



mdkb said:


> wondered what peoples thoughts are on this stock right now.





Hi mdkb,

You might have had a reply by now if you were to say what your thoughts are of the stock presently and where do you think it is going - maybe you already own some of the stock and thinking of pulling out or buying more...

Too many people join up here (and elsewhere) and their first post is what do you think is going to happen to this stock? - gee its gone down so far how long will it take to get back to where it was last week? Then some members have been kind enough to give (generally a long reply) only to never see them again - very rude un-ASF!!

Regards PB


----------



## Julia (3 December 2014)

*Re: MTS - Metcash*

+1, piggybank.  Exactly.


----------



## Garpal Gumnut (3 December 2014)

*Re: MTS - Metcash*

I've been in MTS in it's early days and one or two years ago. 

Fundamentally and technically it is stuffed.

If I still held I would get out on the next bounce up.

Just my opinion, I have no inside knowledge on this stock

gg


----------



## UMike (9 March 2015)

*Re: MTS - Metcash*

Picked up a small parcel today on the basis that I think they are over sold.

Not too confident of my reasoning. but......

P/E Ratio  6.55  
P/B Ratio  0.83  
P/E Growth Ratio  10.00  
P/S Ratio  0.10 
Dividend Yield  10.7   (franking 100%)


----------



## Googolplex (9 March 2015)

*Re: MTS - Metcash*



UMike said:


> Picked up a small parcel today on the basis that I think they are over sold.
> 
> Not too confident of my reasoning. but......
> 
> ...




I have bought a little bit in recent days. Two things worry me; first, the Company has said very little re providing up to date guidance and secondly, there must be some reason why the market is ignoring the numbers you have quoted above.


----------



## skc (10 March 2015)

*Re: MTS - Metcash*



UMike said:


> Picked up a small parcel today on the basis that I think they are over sold.
> 
> Not too confident of my reasoning. but......
> 
> ...




You should consider looking at forward ratios rather than historical ratios. Forward ratios aren't always easy to get, but when earnings are in flux, even a rough estimate will be better than taking the historical number on face value.

Take dividend and its yield for instance... management has slashed payout ratio in the presentation to pay for store upgrades and what not. Earnings in decline so the actual dividend amount will continue to reduce. Last half it paid 6.5cps. Even if you were to annualise that you only get 13c which is 9.35% yield. UBS is estimating 10c for FY16, FWIW.  

The key theme for MTS at the moment is "operational deleverage"... and that's about as bad as it gets as far as dividend stability is concerned.


----------



## UMike (31 July 2015)

*Re: MTS - Metcash*

Yea the desicion to suspend the payment of dividends did hit me a bit.

Been buying back in just over $1 and selling $1.15 twice now pairing back my losses. as I am sure the floor is $1.02.

Might be a long road back but it seems the 3 big fod stores are bouncing a bit.


----------



## notting (31 July 2015)

*Re: MTS - Metcash*

If they conserve cash it will make the perfect private equity target or a frightening stage entrance for something like LIDL. Fingers crossed for you.


----------



## UMike (16 October 2015)

*Re: MTS - Metcash*

Thanks notting.

Been real patient although I missed buying in again at around the 95c mark (charts say the low was 96c but I'm sure the intra day price was less. (I had a "will buy at" limit set that I didn't act on))  I have sold most of my holdings today. $1.41

Dunno how I got out of this one so well. Really from 21-9-15 to now 16-10-15 there has been a 50% retracement.

I learned my lesson and made a bit as well.


----------



## notting (2 December 2015)

*Re: MTS - Metcash*

Since short covering rallies are the focus of the day.
This one seems to have run out of puff for the moment.


----------



## UMike (3 December 2015)

*Re: MTS - Metcash*



UMike said:


> Thanks notting.
> 
> Been real patient although I missed buying in again at around the 95c mark (charts say the low was 96c but I'm sure the intra day price was less. (I had a "will buy at" limit set that I didn't act on))  I have sold most of my holdings today. $1.41
> 
> ...



Totally out now....

I'd love to say I'll never buy back into a debt ridden baket case But I took a small punt in MesoBlast.... Maybe I'll never learn.

Good Luck MTS holders. I still like my little local Foodworks store over the Major Ones.


----------



## notting (22 January 2016)

*Re: MTS - Metcash*

Whilst I think its good that metcash is now trying to be price competitive in its supermarkets. This break out rally on the back of Masters writing itself off seems somewhat questionable since Masters has been such a monumental failure, that never laid glove on Bunnings or anybody else, what does difference it make to anything?


----------



## notting (27 January 2016)

*Re: MTS - Metcash*

The other thing to be, well alarmed about with this one, is that it also bought the Mitre 10 Franchise because WOW started up the Masters disaster.  The CEO at the time said, something along the lines of well it seems to be what your meant to do because others are doing it!!! :bonk:  
Yeah that's how you make innovative and shrewd business decisions.

I guess it could have bee a fluke as at least Mitre 10 had a business that was not losing a fortune, but I doubt whether it was a smart buy!


----------



## notting (18 May 2016)

*Re: MTS - Metcash*

Loading up the truck to take a huge dump on this as soon as this break out breaks down!
It's about as compelling as Dick Smith!


----------



## joeno (19 May 2016)

*Re: MTS - Metcash*



notting said:


> Loading up the truck to take a huge dump on this as soon as this break out breaks down!
> It's about as compelling as Dick Smith!




Why do you say that? Metcash is looking pretty compelling to me from a fundamentals point of view


----------



## notting (19 May 2016)

*Re: MTS - Metcash*



joeno said:


> Why do you say that? Metcash is looking pretty compelling to me from a fundamentals point of view




What fundamentals would they be exactly?
Nice looking fake out today so far!!!
Failing to power on after yesterdays break, ran up at the start then got destroyed.
Pretty keen selling down to 1.92 so far!!
Traders probably moving their long stops to 1.85 after that.
It tested that break 4 times over the last six months so it would be suprising to see it break down, unless they all start looking at reality.
Remembering they bought Mitre 10 at the time WOW embarked on it's legendary Masters venture. The reason they gave was something like, "Well it seems like the thing to be getting into." :headshake Now that's leadership!!


----------



## joeno (19 May 2016)

*Re: MTS - Metcash*



notting said:


> What fundamentals would they be exactly?
> Nice looking fake out today so far!!!
> Failing to power on after yesterdays break, ran up at the start then got destroyed.
> Pretty keen selling down to 1.92 so far!!
> Traders probably moving their long stops to 1.85 after that.




What's your price target then if you hold this share? I admit recent few days rally has been a surprise. However it's a big earner revenues through the roof.


----------



## notting (19 May 2016)

*Re: MTS - Metcash*



joeno said:


> What's your price target then if you hold this share? I admit recent few days rally has been a surprise. However it's a big earner revenues through the roof.




I'm not short them yet.  Longer term 80c


----------



## notting (20 May 2016)

*Traders vs Big seller*

Quite the odd way to achieve a higher high ----


----------



## joeno (20 May 2016)

notting said:


> *Traders vs Big seller*
> 
> Quite the odd way to achieve a higher high ----




So much for your conviction that it's heading to 80c... oh great fortune teller.


----------



## notting (20 May 2016)

joeno said:


> So much for your conviction that it's heading to 80c... oh great fortune teller.




Get a brain!
If I had conviction I would be short it. I have actually still a small long on it.  Simply because of the way it has been trading.
Today it got a boost from a broker upgrade which again ran into fat sellers!
Whilst I think it will get to 80, then I will be looking for 40c doesn't stop me from going long when the half wits believe it and brokers promote it like they did Dick Smith.......


----------



## skc (20 May 2016)

notting said:


> *Traders vs Big seller*
> 
> Quite the odd way to achieve a higher high ----




Yes those quick random dumps were nasty. Took me the 3rd time to actually scope some up... but then I sold a lot at the $2 resistance so by the time it got up to $2.06 I only had about 1/5 left. Came back a bit into close but still finished reasonably high in the range and has been on a tear since WOW's quarterly sales.

Yeah it was CS who upgraded the stock... it's a heavily shorted names so the spike is not unexpected. The analyst report was drawing some pretty long bow though (like bad sales at WOW implies stronger sales at MTS - I am not so sure...).


----------



## joeno (20 May 2016)

skc said:


> Yes those quick random dumps were nasty. Took me the 3rd time to actually scope some up... but then I sold a lot at the $2 resistance so by the time it got up to $2.06 I only had about 1/5 left. Came back a bit into close but still finished reasonably high in the range and has been on a tear since WOW's quarterly sales.
> 
> Yeah it was CS who upgraded the stock... it's a heavily shorted names so the spike is not unexpected. The analyst report was drawing some pretty long bow though (like bad sales at WOW implies stronger sales at MTS - I am not so sure...).




Are we of the opinion that this stock is peaking? It seems to still be solid in terms of profitability and sheer revenues. But seems to be caught in the whole "supermarket stocks are tanking and you should sell" drama.


----------



## notting (21 May 2016)

skc said:


> Yes those quick random dumps were nasty. Took me the 3rd time to actually scope some up... but then I sold a lot at the $2 resistance so by the time it got up to $2.06 I only had about 1/5 left. Came back a bit into close but still finished reasonably high in the range and has been on a tear since WOW's quarterly sales.
> 
> Yeah it was CS who upgraded the stock... it's a heavily shorted names so the spike is not unexpected. The analyst report was drawing some pretty long bow though (like bad sales at WOW implies stronger sales at MTS - I am not so sure...).




I actually tried to offload at 2.06 but it didn't get filled.
WOWs quarterly sales will be going to Aldi not MTS which is a trend that is only going to eat away at everyone's margins!


----------



## notting (31 May 2016)

Waiting waiting waiting.
I mean seriously - 



> Discounter Aldi is now Australia's most profitable supermarket retailer and is set to reach "tipping point", grabbing a bigger share of the main grocery shop and significantly disrupting the Coles and Woolworths duopoly.
> 
> According to a major report by UBS, Aldi's sales are expected to grow 15 per cent a year for the next three years – four or five times the rate of grocery market growth – reaching at least $10.6 billion and as much as $14.8 billion by 2019 if the discounter fixes perceived problems such as customer service and the quality of its fresh food.
> 
> UBS analyst Ben Gilbert expects Aldi's share of the national grocery market to rise from 7 per cent to at least 10 per cent by 2019-20, taking at least $1 billion in combined sales each year from Woolworths, Metcash and Coles


----------



## joeno (2 June 2016)

Time to dump?


----------



## notting (9 June 2016)

joeno said:


> Time to dump?




Got off and short at 2.06 but it has to break minor 1.90 then 180.
There is a fair bit of consolidation under pinning it, so it would take a realistic report to get sentiment down for all those new holders that got sold into since Jan.
Aldi's growth could have done it but it hasn't respond yet.  There are two deep pocket sellers quietly trying to offload above 2.


----------



## leyy (10 June 2016)

I have actually taken a long position in MTS.

I think it is excellent value at this price, they are still in a transformational stage of improving the business and cost cutting.

Hopefully it can stay above resistance levels of $2.00, it is looking quite positive on an up trend in both daily/weekly charts.


----------



## luutzu (10 June 2016)

leyy said:


> I have actually taken a long position in MTS.
> 
> I think it is excellent value at this price, they are still in a transformational stage of improving the business and cost cutting.
> 
> Hopefully it can stay above resistance levels of $2.00, it is looking quite positive on an up trend in both daily/weekly charts.




I can't remember why but I was going to load up on it at $1 - 1.05 last year, but didn't. Probably because it was such a bargain at that range and that's about it.

Can't be asked to look its value at $2 but been looking at WOW and it looks very interesting.

MTS hasn't had a great history. It relies too much on too many independent operators - each of whom would be doing it quiet tough when the other 3 move in next door.

For my money I'd go with WOW. Long term (say within 5 years), it'd at least reach $31. With dividends and you could double your money.


----------



## Value Hunter (10 June 2016)

My view of Metcash is as follows:

-IGA: Even if sales hold up their margins will go down over time due to increased price competition (which will only accelerate) from Aldi and Costco. The same thing will happen to Woolworths and Coles over the next 5-10 years but perhaps to a lesser extent. Also in my opinion its basically a larger fancier version of a convenience store rather than a true supermarket (except for the mega IGAs). They should only operate in high foot traffic areas where there is no supermarket nearby. A good example of a well placed IGA in Sydney is the one at UNSW (its a 15-20 minute walk from the nearest Coles or Woolworths) so you have plenty of University students coming in to buy a few things (most still go to Coles or Woolworths if they need to do major shopping) due to the convenience. IGA at petrol stations can also be competitive because Coles Express (at petrol stations) and Woolworths at petrol stations charge higher prices than their normal supermarket stores. 

-Mitre 10: They will never be an effective competitor to Bunnings. The only stores that can do well are the ones that operate in suburbs where there is no Bunnings. Given Bunnings continued gradual store roll-out over time there will be fewer and fewer locations where they could be open. A good Mitre 10 is one that is in a regional area that is too small in terms of population for a Bunnings to bother opening or a crowded inner city suburb of a capital city CBD where there is not a big enough floor space (at a reasonable rent) for a Bunnings to open. For example in Sydney there is a Mitre 10 in Bondi-Junction, two in the CBD and one in Paddington all owned (as a franchisee) by the same guy. They are doing relatively well in those locations because Bunnings can't open nearby due to their not being an empty site/store large enough and with a reasonable level of rent for them to open a store, coupled with the fact that the nearest Bunnings store is too far away for some people too bother going. Its basically a niche business that should not try and compete with Bunnings head on. It will never be a 1000 store business. Any attempt to expand the store footprint greatly will likely result in losses from trying to take on Bunnings head on. In my opinion Mitre 10 is the sort of business that would do well with maybe 100 - 200 stores strategically placed throughout Australia and New Zealand and no more. 

Basically its main earners of IGA and Mitre 10 are niche business that can only support a very limited store footprint. They over-expanded and got themselves into trouble. This type of business is better off as a private company where it doesn't have the pressure to grow into locations it shouldn't. Just like the pressure for growth induced by being a public company caused Dick Smith to open too many stores first under Woolworths then continued under private equity which caused it to go under (Dick Smith said so in a TV interview this year that it was his opinion that dick smith would have been a viable business with a smaller number of stores).


----------



## notting (16 June 2016)

Skillful intraday dumping on tech traders still the theme of the day.
Gotta wonder if they skillfully pushed it up in the first place to get the tech trading volumes and short cover's to dump on.
Hard to see it accelerating higher out of this in the next week!





Look out ALDI here comes Metcash, yeh right.


----------



## notting (20 June 2016)

That would be the realistic report today - Bottom line margin deflation vs 16% earnings increase.
That translates as already working harder for going nowhere and the competition is just getting started.



notting said:


> So it would take a realistic report to get sentiment down for all those new holders that got sold into since Jan.











notting said:


> Skillful intraday dumping on tech traders still the theme of the day.
> Gotta wonder if they skillfully pushed it up in the first place to get the tech trading volumes and short cover's to dump on.
> Hard to see it accelerating higher out of this in the next week!






Bang and Down 12%, on a very positive day for the market!

Now it's the longs that are covering LOL


----------



## notting (20 June 2016)

notting said:


> That would be the realistic report today - Bottom line margin deflation vs 16% earnings increase.




I forgot to say that this was for Food & Grocery.  Over all earnings were only up 1.3%


----------



## notting (23 June 2016)

Testing the fires of hell.




Support built since January getting punched hard!!!


----------



## joeno (4 July 2016)

Sold half of my holdings at 1.9 a few weeks back. A little uncertain which direction its going to go now.


----------



## notting (25 August 2016)

Cracker deal, not just the purchase of Home Timber and Hardward's wholesale business but the stunning 80 million institutional placement a $2.00 OMFG!!!!

Who the hell would buy that.  They obviously have incredible faith in M10s ability to compete with Bunnings because competition in the supermarket wars is just getting going.

Gotta hand it to the sale team in management who sold that to institutional investors.

There is room for two hardware players in this market, seems everyone is thinking they can do it.

In addition share price getting a great kicker from the short squeeze today on the announcement as it is one of the most shorted stocks.  That should help them get the retail placement off nicely.  Great performance from those in the management jobs of this company.  

Let's see what happens to share holders when the rubber hits the road on hardware.  That's where the game is.

Now lets look at that -
Personally I'd love to see them have a crack at Bunnings but since Woollies have sold all the inventory to one company and the stores real estate to another that means no real direct competition, only chewing at the edges.
Wesfarmers smiling me thinks!


----------



## Smurf1976 (25 August 2016)

notting said:


> There is room for two hardware players in this market, seems everyone is thinking they can do it.




Not sure about other states but in Hobart we've had two major players in the hardware business since the mid-1980's, that being K&D Warehouse (locally owned and the same "warehouse" concept as Bunnings) and Bunnings and its predecessors (Harrys, BBC, Hardwarehouse).

Over the past year or so Bunnings has replaced their largest store (north of the city) with a bigger one, built a new store south of the city and is now building another one on the Eastern Shore.

Gut feel and having been to both K&D and Bunnings in recent times tells me that Bunnings is slowly but surely gaining the upper hand. K&D isn't dead but it's nowhere near as busy in their stores as it once was, "struggling" would be perhaps the best description there.

K&D seem to have shifted their marketing strategy to one of "we're locally owned, support the local guys" more than anything else these days. That might work in Hobart since they are indeed locally owned but the same strategy won't work for MTS since they too are a national company as is Wesfarmers. Both could say they're Australian, neither could say they're locally owned in one particular state or city.


----------



## tinhat (25 August 2016)

notting said:


> There is room for two hardware players in this market, seems everyone is thinking they can do it.




Never owned MTS and probably never will. Without knowing much about the business specifically, there is a vast area of the country that will never be serviced by a Bunnings. The demographics might suggest that this geographic market is in long term decline but, it still exists.


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## leyy (26 August 2016)

Metcash is a long-term play.

There is always room for a duopoly or triopoly

Look at the the broader market/industry

JB-Hifi / Good guys / Harvey norman

Coles / Woolies / Aldi /IGA

David Jones / Myer

Telstra / Optus / TPG

It all depends on how well the executive team/CEO run's the company and this can either make or break the company.


Cheers
leyy


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## greggles (25 May 2018)

Solid run by Metcash over the last 12 months. It seems to be going from strength to strength after bottoming out at around $1 back in 2015.


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## leyy (28 May 2018)

greggles said:


> Solid run by Metcash over the last 12 months. It seems to be going from strength to strength after bottoming out at around $1 back in 2015.
> 
> View attachment 87514




May have spoken too soon.

Announcement of a major contract loss for Drake supermarkets in South Australia which is circa $270m in sales in FY18.

Doesn't say impact on future earnings but based on their margins of 2.7% would say circa $7.3M in EBITDA.

Stock price hammered down 17%


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## peter2 (28 May 2018)

_MTS short term trader_: _ (not on this forum)_
Yeah, I bought the break-out. I'm a genius. P2 can eat my dust.
Why didn't I sell when the bars turned red. Ignored my plan. 
Yeah, new highs, only suckers sold this, my TP's OK but I'm a discretionary trader! 
Oh no! All my profits are gone and now I'm losing. Let's hold this for another day. Price'll bounce back.


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## greggles (29 May 2018)

leyy said:


> May have spoken too soon.
> 
> Announcement of a major contract loss for Drake supermarkets in South Australia which is circa $270m in sales in FY18.
> 
> ...




Yes I spoke too soon. Exactly one day too soon. The MTS share price slide has continued this morning and is currently down another 4.62% to be trading at $2.89. Losing that Drakes Supermarkets contract was a big body blow for Metcash. It will be interesting to see where their share price stabilises after the dust has settled.


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## systematic (29 May 2018)

greggles said:


> Losing that Drakes Supermarkets contract was a big body blow for Metcash.




Is that what happened?  I was up 20% on this and now nought.  I had a bad day across the board yesterday, resulting in a portfolio loss of around 6%


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## greggles (29 May 2018)

systematic said:


> Is that what happened?  I was up 20% on this and now nought.  I had a bad day across the board yesterday, resulting in a portfolio loss of around 6%




Yes, the announcement came through yesterday just after the open. Here it is in full:



> *Potential new DC and loss of major customer in South Australia *
> 
> Metcash Limited (ASX:MTS) advises that it is planning for a potential new purpose-built Distribution Centre (DC) in South Australia.
> 
> ...


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## greggles (6 June 2018)

Metcash have announced this morning that its financial statements for the year ended 30 April 2018 will recognise a $352 million impairment to goodwill and other net assets in the Supermarkets & Convenience pillar. 

The impairments follow the company's year-end review of the carrying value of its assets. The review has taken into account the information contained in Metcash's ASX release on 28 May 2018 concerning Drakes Supermarkets in South Australia, as well as weakness in the Western Australian economy and the ongoing intensity of competition in the sector.


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## Miner (5 December 2018)

MTS has taken the southwards direction once again and seems unstoppable. I still do not know who pays MTS when the IGAs vary on their prices, independently owned, some of them are just pathetic quality wise and storage wise even you pay the premiums. the exception is there on the Duncraig WA 6023 IGA - fantastically competitive, whereas IGA owned by the same owner at Darch/Perth looks pretty excepting you pay on an average 10% more than the Duncraig shop.
How MTS makes money from here?? DNH


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## bigdog (11 October 2019)

Financial Review reported today

*Metcash to lose part of 7-Eleven contract*





*Sue Mitchell*Senior Reporter
Oct 10, 2019 — 12.00am

Metcash is in negotiations with one of its biggest customers, convenience chain 7-Eleven, to salvage long-term supply contracts, just weeks after losing its $270 million a year agreement with Drakes Supermarkets.

7-Eleven, which has 700 stores around Australia and annual sales of more than $3.4 billion, is changing its supply chain to support the company’s growth and focus on fresh food, and has put contracts for the supply of food and groceries up for tender.

As a result of the first tender, 7-Eleven decided to source the majority of the products for its eastern seaboard stores directly from suppliers and its current contract with Metcash will expire in August 2020.

7-Eleven is seeking tenders for the balance of the products it needs for eastern seaboard stores. Metcash is participating in the request for proposal and is also in discussions to supply 7-Eleven’s stores in Western Australia.

A Metcash spokesman confirmed on Wednesday that negotiations were still underway.

"Metcash is in discussion with 7-Eleven with regard to retaining the volumes for the products we currently supply," the spokesman said.

"We are aware that 7-Eleven is changing its supply model which will include the daily supply of fresh products to their stores. Metcash is not currently, nor will it be, the supplier of fresh items to 7-Eleven."

Metcash's contract with 7-Eleven is estimated to be worth more than $350 million in annual sales, larger than the $270 million a year Drakes supply contract.

However, the margin on sales is lower so the loss of the contract will have less impact on Metcash's earnings. Citigroup analyst Bryan Raymond has estimated the contract could cost Metcash about $14 million in lost earnings, while the loss of the Drakes contract is expected to crimp earnings by about $16 million.

Metcash has been supplying 7-Eleven since 2005, when the convenience store chain had about 350 franchised stores. The initial contract, worth about $200 million a year, was extended in 2011 when 7-Eleven bought about 230 Mobil outlets, which boosted the agreement by about $140 million a year.

7-Eleven, which is owned by the Withers and Barlow families, has grown significantly in recent years and now has the scale to negotiate more competitive trading terms with food and grocery suppliers.

According to the most recent accounts filed with ASIC, 7-Eleven's sales rose 21 per cent to $3.4 billion in the 12 months ending June 2018, boosted by new store openings and strong same-store sales growth in merchandise and fuel.

"7-Eleven is growing strongly, and while our industry leading supply chain has served us well, it needs to evolve to enable our future growth," said chief executive Angus McKay.

"Our new supply chain eco-system will enable us to expand to meet our projected volumes and store network growth, and will reduce complexity for our stores,” he said.

Metcash is under growing pressure to reduce prices to stop independent retail customers and convenience chains from sourcing directly from suppliers or moving to self-supply.

As reported in _The Australian Financial Review_ last month, Metcash's second-largest independent retail customer, Drakes Supermarkets, plans to go into competition with Metcash by supplying other independent supermarkets once it has bedded down a $125 million state-of-the-art automated distribution centre it opened this month in Adelaide.

Metcash has attempted to stop further independent retailers from leaving by signing long-term (10 year and five year) supply contracts and investing in stores, distribution centres, range and prices.

673


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## kashtrade (16 January 2020)

Can Metcash outperform Woolworths via a spin-off? thoughts? https://www.fool.com.au/2020/01/16/can-metcash-outperform-woolworths-via-a-spin-off/


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## Miner (19 May 2020)

kashtrade said:


> Can Metcash outperform Woolworths via a spin-off? thoughts? https://www.fool.com.au/2020/01/16/can-metcash-outperform-woolworths-via-a-spin-off/



Was there a spin off from MTS ?
I could see a CR to pay off debts solely @$2.80 against current MP @$2.4.
I often wonder what sort of calculation does the insto undertake to commit $300 M to pay some company's debts. Ironically people like us also buy shares of those instos. That is a pretty disgusting story because the few of the key lead brokers/ fund managers harness a hefty commission following the CR.
Reading through the investor report, I could not find any attractive lines which could have motivated the investors to invest ?? Smooth talking marketing ??

nhttps://www.asx.com.au/asxpdf/20200420/pdf/44h2hfnb99lv63.pdf


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## Dona Ferentes (20 May 2020)

Miner said:


> MTS has taken the southwards direction once again and seems unstoppable. I still do not know who pays MTS when the IGAs vary on their prices, independently owned, some of them are just pathetic quality wise and storage wise even you pay the premiums.



The 'third force'!! Corner store equivalent, and priced accordingly. They have never gained traction, and sometimes the best research is "eyeball and wander". Never have I seen a $200  of groceries wheeled out of an IGA store, their peak times are 5-7pm and it's 2-3-4 items, sub $30 _what's for tea_ type purchases.   

(Used to hold but that was pre-GFC)


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## Dona Ferentes (7 December 2020)

but doing well with Covid-times. I guess if you can't go more than 5km, then the 'local' becomes the only option






 Significant growth in sales volumes across all Pillars
 Strong earnings growth with underlying Group EBIT up 30.4% to $203.0m
 Group revenue increased 12.2% to $7.1bn and 12.3% to $8.1bn including charge-through sales
 Strong sales growth underpinned by investment in MFuture initiatives
 Food –move to ‘shop local’ and the improved competitiveness of retailers resulted in an increase in both foot traffic and average basket size
 Liquor –high levels of demand across the retail stores more than offset the adverse impact of trading restrictions on ‘on-premise’ customers
 Hardware –elevated demand from DIY customers and a return to growth in Trade
 Underlying profit after tax increased 43.0% to $129.6m
 Statutory profit after tax of $125.1m (1H20: Loss of $151.6m1)
 Strong cash generation and efficient management of working capital
 Positive operating leverage supported through efficient management of costs while investing in COVID Safe  work practices
 COVID related costs have been well managed and were ~$8m in 1H21
 Continued investment in growth opportunities, including the acquisition of Total Tools and the Kollaras private label business 
 Sales momentum has continued into 2H21 with strong growth in first five weeks
 Increase in interim dividend to 8.0 cents per share (1H20: 6.0 cents)


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## Dona Ferentes (17 March 2021)

Supermarket, hardware and liquor supplier Metcash produced a strategy and trading update to the market yesterday. Metcash revealed solid sales data for the second half of its financial year so far but more importantly it outlined tweak to its dividend policy that will see total payout to shareholders rise to 70% of underlying profit after tax from the present 60%.  The company said in the update that the higher dividend payout ratio will start in the current financial year and the board will ensure the dividend remains fully-franked.

Good news of that type would normally see the share price rise. But .... the shares fell through the day to be down nearly 4% at $3.39. That was in a market that ended up 0.6%. Actually, Metcash shares were up 1.3% in early trade, so the crunch on the day was larger than it looks – more than 5%.

That’s despite what was an_* upbeat trading update*_.  Metcash reported strong sales momentum for all business segments so far in the second half of 2021. Supermarket, hardware and liquor sales have all jumped by double digits compared to the prior corresponding period.  Metcash told investors in the strategy update that it has seen a shift in consumer behaviour that has benefited its retailer network and is generating “strong sales momentum”. Metcash added it has made “additional investment in shopper retention”.

In the *food *division, supermarket sales increased 14.4% in the first four months of the second half of 2020-21 (November 2020 to February 2021 as Metcash’s year runs May to April), compared to the same period in 2019-20. Food sales were up 4.1%, or 14.1% excluding the impact of losing a 7-Eleven tobacco supply contract.
In its *Mitre10 hardware* division, sales were still strong, up 31.6% in the November to February period, and in liquor sales are up 19.6% “with continued strong sales in the retail network more than offsetting the adverse impact of COVID-19 restrictions on ‘on-premise’ customers”.
It said *liquor *sales to Independent Brands Australia (IBA) were up nearly 24%. This includes retailers like Cellarbrations, Thirsty Camel, The Bottle-O, and Porters Liquor.
But it did warn that the growth would disappear this month and in April when comparisons are made with the same months of 2020 which saw a surge in grocery sales as the lockdowns started across the country. In fact growth could fall on a comparison with the same months in 2020 and perhaps for May as well. As well corporate costs have tripled to $15 million due to higher insurance and staff bonuses. 

So the shares were sold off, even though sales growth hasn’t tanked and dividends will be juiced with a higher final for the year.


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## Miner (28 January 2022)

Extract from Wallet Investor . Contrary to wallet Investor, has the bottom reached today ?
- DNH


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## Dona Ferentes (5 February 2022)

*Ally Selby: * And welcome to Livewire Markets and _*Buy Hold Sell*_. I am Ally Selby. And as many of you know, markets have been off to a rough start in 2022, with the S&P/ASX 200 down around 7 per cent.

So, which companies can help you sleep at night and weather the volatility ahead? Glad you asked. Today we are joined by Bruce Williams from _Elston _and Simon Conn from _IML_.

*Ally Selby: *We asked our fundies to bring along one all-star Aussie company that they think can weather the volatility ahead this year. Simon, I might start on you. What have you brought for us today?
*Metcash*​*Simon Conn: *_Our focus is on the mid and small-cap sector, so I’ve picked Metcash today. We think it’s an underappreciated franchise, and a business that’s no doubt benefited from COVID-19, but I think that’s delivered enduring benefits to their food business. But also their liquor business has been growing and is a very resilient business. But really it’s the hardware business, where they position themselves as the second player in the hardware, retail and wholesale markets that we think is underappreciated by investors._
_
Their acquisition of Total Tools looks really well priced. They bought that prior to COVID-19, effectively on about three-and-a-half times EBITDA. A business that’s grown very well through COVID-19. But we think as the franchisees and the operators in those networks reinvest in their stores with the increased profitability they’ve generated, the local consumers are spending more in their local communities, and we think that will continue to a large extent, going forward. And all of those stores have been refurbished. And again, the hardware business, I think can continue to do well going forward. And the thing about Metcash is it’s really attractively priced on 13 times, and a yield of over 5 per cent, with a really strong balance sheet. For us, it looks like a standout in the market, where a lot of stocks look pretty fully priced._


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## Dona Ferentes (7 September 2022)

In the first half of the 2023 financial year despite increased supply chain and labour cost pressures:

Group sales rose 8.9 per cent in the 17 weeks to 28 August.
Supply chains and stock availability has improved.
Food sales increased 4.3 per cent and supermarket sales climbed 3.4 per cent (both inclusive of tobacco)
Hardware sales gained by 19.5 per cent (inflation in trade sales was emphasised)
Liquor sales added 11.5 per cent.


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## Dona Ferentes (5 December 2022)

The company declared an interim dividend of 11.5¢ a share, up 9.5 per cent on FY22
reported a 10.3 per cent increase in underlying EBIT to $255.1 million.
Revenue rose 8.2 per cent to $7.7 billion for the six-month period.
MTS reported a 9.1 per cent increase in underlying profit to $159.9 million. On a statutory basis, profit after tax was $125.7 million.
In the second half, the company said group sales were up 6.2 per cent in the first four weeks.
Metcash said while supply chain challenges had improved, they continued to be a risk in the next six months along with additional fuel, freight and labour costs.


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## Miner (5 December 2022)

Dona Ferentes said:


> The company declared an interim dividend of 11.5¢ a share, up 9.5 per cent on FY22
> reported a 10.3 per cent increase in underlying EBIT to $255.1 million.
> Revenue rose 8.2 per cent to $7.7 billion for the six-month period.
> MTS reported a 9.1 per cent increase in underlying profit to $159.9 million. On a statutory basis, profit after tax was $125.7 million.
> ...



I was gathering MTS performance will be better with my wife's focus on shopping through IGA than standing on Wooly and Coles, the volume of goods people are buying at IGA and excepting vegetables, prices at my local IGA (not all) stores is becoming competitive and many a times better than the same from super markets.
With Christmas time IGA would get leverage not only on groceries but also on alcohols
DNH


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## divs4ever (5 December 2022)

Miner said:


> I was gathering MTS performance will be better with my wife's focus on shopping through IGA than standing on Wooly and Coles, the volume of goods people are buying at IGA and excepting vegetables, prices at my local IGA (not all) stores is becoming competitive and many a times better than the same from super markets.
> With Christmas time IGA would get leverage not only on groceries but also on alcohols
> DNH



indeed do not forget the alcohol , i notice the local  strip mall  , has acquired  an IGA  franchised liquor  outlet  ( fairly recently )


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## wayneL (5 December 2022)

Since acquiring a modest position in Metcash we have been shopping at IGA and other Metcash outlets (especially Total Tools, I spend a freakin fortune there).

I kinda like the philosophy (and we do have the shxts with Woolies and Coles) and will buy more MTS when the price is right.


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## Miner (5 December 2022)

Your fortune is getting reinvested (LOL). On a serious note, I buy on specials . For example Digestive biscuit (Mcvites) are often available at $2.99 at IGA where as normal prices in Wooly and COles is $4.50 excepting  they throw the discount. Milk is same price. Potato is cheaper at IGA, Eggs are cheaper by $2 each carton. Yoghurt is often cheaper at IGA than Coles/W. Dish Washing powder I buy from Red Dots but washing rinse from IGA. Other stuff excepting vegetables (often come from Asian shops to my home any way) are dearer both in IGA and Woolies.  Coffee and Tea- not a daily item so buy when it is reduced at IGA. So smart shopping is the key to reinvest the fortune on IGA shares 


wayneL said:


> Since acquiring a modest position in Metcash we have been shopping at IGA and other Metcash outlets (especially Total Tools, I spend a freakin fortune there).
> 
> I kinda like the philosophy (and we do have the shxts with Woolies and Coles) and will buy more MTS when the price is


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