# JBH - JB Hi-Fi



## Phoenix

Is anyone holding this stock what are your thoughts. Looks like it has good long term prospects. I would like to know what you think.


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## bingk6

Phoenix said:
			
		

> Is anyone holding this stock what are your thoughts. Looks like it has good long term prospects. I would like to know what you think.




Yep, I hold this stock. From a retail point of view, the electrical section (Plasma TVs, LCDs, AMPs, Home Threatre, PCs, Games etc etc) is the big winner. When you compare this company with our current benchmark (HVN), you will note that it consists of the best parts of HVN. HVN has other items like white goods, furniture etc etc, which is hardly what you would define as earth shattering.

If you need any more convincing on the merit of this company, just go along and have a look at their stores. Everytime I visit their store, there is usually a queue of people just waiting at the counter to pay. Compare this to HVN whereby there is usually no queue waiting to pay (if at all).

The sheer number of people entering their stores are staggering. I doubt whether in any shopping centre where they have their stores, that there would be another company (within the same shopping complex) that would have the the same number of shoppers per square meter of store space as they would.

I believe that their concept is working very well and they will really shine in the years to come.


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## Phoenix

Hi bingk6.

Thanks for your view I just bought this stock a few days ago for a trend rebound trade and am now thinking of holding this a little longer since uni is coming up and I won't be able to trade as much as I would like to.


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## Buy low. sell high

JB Hi-Fi has been mulitiplying like rabbits, I can name 5 new stores within 10km of where I live in the last year, plus more on the other side of Melbourne. All stores I've been to are always busy as hell.

Yes I own the stock.


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## kgee

yep i'm a believer in jb hi fi just for the fact that its the one shop I can't walk into without buying somthing!!


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## insider

JB hifi have come along way since their very first store in Centerway East Keilor... I live close to it... It's great but the employees are a pack of slackers that take advantage of the comapnies buying power... they always get stuff at cost price and buy stuff for their mates and so on...


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## bingk6

insider said:
			
		

> It's great but the employees are a pack of slackers that take advantage of the comapnies buying power... they always get stuff at cost price and buy stuff for their mates and so on...




What the company should do is to offer stuff at cost to their shareholders   
Realistically though, shareholders really cannot complain.


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## Buy low. sell high

bingk6 said:
			
		

> What the company should do is to offer stuff at cost to their shareholders
> Realistically though, shareholders really cannot complain.



The first thing I looked for was if they had a shareholder discount.... no dice. I would save soooo much money if they did.


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## misterS

Yes, it is striking that any the jb hifi store I go into is packed to the rafters with stuff as well as with customers.  Don't know if it is deliberate policy and maybe it breaks down with rapid expansion, but the staff I've dealt with always seem well-informed about their products and not biased to one mfr.

Reminds me of a good auto parts store.  Haven't bought any JBH but probably should have instead of recent mini-bloody-miners.  Thought JBH might be fully valued at about $6 and it might fall back to there no, it didn't. Naturally my miners all retraced...d'oh


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## Buffettology

JBH is one of the ASX long-term goldmines IMHO.


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## Bullion

misterS said:


> Yes, it is striking that any the jb hifi store I go into is packed to the rafters with stuff as well as with customers.  Don't know if it is deliberate policy and maybe it breaks down with rapid expansion, but the staff I've dealt with always seem well-informed about their products and not biased to one mfr.
> 
> Reminds me of a good auto parts store.  Haven't bought any JBH but probably should have instead of recent mini-bloody-miners.  Thought JBH might be fully valued at about $6 and it might fall back to there no, it didn't. Naturally my miners all retraced...d'oh




Wish I could say the same thing, JB stores I have been to don't know squat about car audio, they are usually pushy and just try to get a sale. A little off topic I know (I used to manage a car audio store  )

But as a company, they are doing very well.


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## CanOz

Bullion said:


> Wish I could say the same thing, JB stores I have been to don't know squat about car audio, they are usually pushy and just try to get a sale. A little off topic I know (I used to manage a car audio store  )
> 
> But as a company, they are doing very well.




This stock just stunns me! I don't hold but i comes up on scans all the time...what is it with this thing?

Stellar performance.


Cheers,


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## Sprinter79

Bullion said:


> Wish I could say the same thing, JB stores I have been to don't know squat about car audio, they are usually pushy and just try to get a sale. A little off topic I know (I used to manage a car audio store  )




Surely you would know as well as anyone that if you want a specialist bit of equipment, you go to a specialist store, not a generalist store. 

But, on that note, if you do your research, and know exactly what you want before you go in, you can get it much cheaper


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## Santob

Bought my first batch of them in Dec'05 for $3.80. Mainly on the basis of how much I liked shopping there. Obviously I'm not the only one.


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## Buffettology

Has done well, but grossly overvalued at the moment.  I would be taking the strong sell position here at the moment.  Far better value elsewhere.


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## CanOz

Buffettology said:


> Has done well, but grossly overvalued at the moment.  I would be taking the strong sell position here at the moment.  Far better value elsewhere.




I'd love to short them, but its too counter-trend at the moment, need some reversing action!

One to watch, they can't go on like this forever...maybe some poor retail numbers and an interest rate rise would do it?

Cheers,


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## Jimminy

CanOz said:


> One to watch, they can't go on like this forever...maybe some poor retail numbers and an interest rate rise would do it?
> 
> Cheers,




Quite the contrary, a rising australian dollar has execs licking their lips....new high of 10.98 yesterday. Close of 10.75.

This is still on a strong uptrend imo.


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## MAPfan

Think what sector it is in, the growth 
The quality of management and business plan
The shareholders they have
all indicate a possible blue chip

Another play on technology I like is LYC, hope it becomes another blue chip


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## YELNATS

MAPfan said:


> Think what sector it is in, the growth
> The quality of management and business plan
> The shareholders they have
> all indicate a possible blue chip




Now up to $11.36 today. I haven't seen a chart like JBH's before, just a straight line upwards with no hiccups at all along the way! I was recommended to buy this a few months ago and was waiting for a retrace. Still waiting. Amazing! YN


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## Buffettology

Definately a great and strong trend.  

Greed driving this one however, cant see how its currently worth the price its at, but hey, each to his own.


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## Prem

JB hi-fi have such good service, price, stock that I end up buying all my electronics from them. 

Should I put this into consideration when thinking about whether or not to buy the actual shares. 

Thanks in advance!!


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## Nicks

Prem said:


> JB hi-fi have such good service, price, stock that I end up buying all my electronics from them.
> 
> Should I put this into consideration when thinking about whether or not to buy the actual shares.
> 
> Thanks in advance!!




Yes you should, one of the best factors you can use in deciding to buy into a company......................


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## Prem

Nicks said:


> Yes you should, one of the best factors you can use in deciding to buy into a company......................





Thanks for the quick reply. I might consider buying JB stocks in the future. How is the company going in terms of sales and profit?


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## Buffettology

Prem said:


> JB hi-fi have such good service ,price ,stock that I end up buying all my electronics from them.
> 
> Should I put this into consideration when thinking about whether or not to buy the actual shares.
> 
> Thanks in advance!!




Absolutely you must (as someone else stated, this is one of the most important ways to decide whether to invest or not).  But be careful, you also have to look at the intrinsic value of a company.  At the moment (after a 4 year bull market), every decent company I have valued is above its fair value.  (Though JST was well below a few weeks back, but has since gone gangbusters!).  

On a side note, if people love a stock (i.e.  JBH) it will sometimes get to twice as high as fair value.  It does not get much higher than that from my experience, before it will see a correction back towards its intrinisic value.  

Note:  Fair value changes depending on different calculations, but it is usually somewhat in a similar range.

Huntleys values this share at $7.55, I personally value it lower at $6.


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## Jimminy

Important to note here that JBH is climbing on the back of the A$.

Directors would be licking their lips.


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## Santob

Jimminy said:


> Important to note here that JBH is climbing on the back of the A$.
> 
> Directors would be licking their lips.




Am I right in thinking this..

Given the increasing $AUD, its cheaper for people to import from overseas, but if JB Hifi can continue to grow with a rising dollar, then it bears good news *if* the dollar drops down again?


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## shinobi346

Santob said:


> Am I right in thinking this..
> 
> Given the increasing $AUD, its cheaper for people to import from overseas, but if JB Hifi can continue to grow with a rising dollar, then it bears good news *if* the dollar drops down again?




Thats not JBH's target audience. Its audience is those who dont want the hassle of buying online, wants things now, want aust warranties + support, like to see and try what they are buying first, etc. For these people the falling Aust dollar is of benefit because it allows JBH to drop the price of their goods while keeping their margins the same.


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## Nicks

Yes - JB Hifi's target audience are those whom visit a real shop..

But - the rising AUD helps them immensely as they can import Asian goods cheaper, and hence (hopefully) sell them cheaper and increase consumer demand.

That said I bought JBH for 7.52 in March and offloaded the other day for 11.64 as they are ridiculously over priced now, even if you factor in good business and market position.


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## MAPfan

Continue to hold.
Demand for their goods will stay strong over time I think, thus they will continue to grow.


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## Buffettology

Its price lately was exactly what I expected to see.  

Not much value whatsoever around at the moment.  Maybe WTF if it continues to slide a bit further.  EQN for the long-term still at current prices.  BXB might see a bit of a rise towards 12.00 but I would only take a short-term position on that.


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## Nicks

As I thought. The recent correction has made people think about value. JBH at the price it was (and is) is overvalued and the stock has recently taken a serious rerating.
Might get back in again if it gets below $9 but other than that I dont see good value in it at this stage.


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## MAPfan

BROKER PRICE TARGETS $14 PLUS

Looks like a future blue chip, perhaps Buffetology was right...its an ASX gold mine.

I continue to hold, long termer for me after another great result, plus much growth potential


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## Buffettology

MAPfan said:


> BROKER PRICE TARGETS $14 PLUS
> 
> Looks like a future blue chip, perhaps Buffetology was right...its an ASX gold mine.
> 
> I continue to hold, long termer for me after another great result, plus much growth potential




Its a long-term goldmine, but not at current prices, better value elsewhere at the moment I believe.  Especially at the moment with some great bargains out there, though better to wait until the market consolidates first!


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## MAPfan

Yes will keep JBH as CGT and given its price trends...........and there are some bargains out there...picked up a few...what are you looking at, anything in particular

Am looking at banks, wow, lyc, bbi cab to name a few


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## Buffettology

MAPfan said:


> Yes will keep JBH as CGT and given its price trends...........and there are some bargains out there...picked up a few...what are you looking at, anything in particular
> 
> Am looking at banks, wow, lyc, bbi cab to name a few




I beleive JST is currently undervalued, and also think it will release favourable results in the annual report. Strong retail trade figures, and only has to beat a poor second half period last year to gain decent growth figures. I value JST at around 4.50, so 4.29 is a good price!

MCR is very cheap at the moment, and just got HAMMERED today due to a director dying. A very short-term, one off shock that should not greatly affect the company in the long-run.

EQN for a medium-term position. Good price, though would have to hold until at least the end of 2009.

LRF, great price, with value per share above the share price. The mining sector I beleive has copped more than it should have lately, and will bounce back over the next few years, with short supplies, growing demand etc. 

They are my current stocks of value. Nothing else other than maybe WPL has caught my eye at the moment. WTF may also be a good price though it is hard to value.

With the US rising over 2% on Friday, we should get a strong day trading tomorrow!


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## MAPfan

Thanks for those tips

WPL is one that I really like..not sure about the others, never heard of them, need to research

If wpl gets to $39 Im in on that one, great long term stock, just as I like it.


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## Buffettology

MAPfan said:


> Thanks for those tips
> 
> WPL is one that I really like..not sure about the others, never heard of them, need to research
> 
> If wpl gets to $39 Im in on that one, great long term stock, just as I like it.




Too bad.  If you got on board, you could have made a KILLING in the last couple days.

With the market rising by a few per cent, these stocks easily outperformed that, with the mining sector making the largest recovery as I thought.

MCR rose over 20% I beleive.  With EQN up nearly 15%.


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## juw177

I will be careful on this one. It can either retrace hard when it makes a double top reversal or it can go up for a little more. Hard to say at the moment.


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## Uncle Festivus

juw177 said:


> I will be careful on this one. It can either retrace hard when it makes a double top reversal or it can go up for a little more. Hard to say at the moment.




Looking a bit toppy around these levels, and a director also thinks so, selling some stock around the $13.35 price. Time for a short?


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## Uncle Festivus

New position, now short @ $14.25 again. Great little CFD trading stock this one, but still looking for the capitulation top soon.


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## juw177

Can be a bit dangerous picking tops on this one because the uptrend is still in place. I shorted at $13 and got stopped out very quickly.


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## Uncle Festivus

juw177 said:


> Can be a bit dangerous picking tops on this one because the uptrend is still in place. I shorted at $13 and got stopped out very quickly.



Yes, good trading the swings though. Looking for a new short trade at these levels after touching a major level $15 on low volume and gap up. They will have to come up with some spectacular earnings to support the current P/E, and a possible interest rate rise is on the agenda?


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## Dilan

Hey guys,

Found this on JB. http://www.smarthouse.com.au/HD/HD_DVD/J8T5Q8M5

So pretty much what I gather is, that they are going in favour of the HD DVD technology. 

Hmmm, Blue-Ray versus HD. It is like Betamax versus VHS format war, we all know Sony lost that one despite having the technically superior product. I dont know what sort of impact this will have on the SP though.


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## Uncle Festivus

Dilan said:


> Hey guys,
> 
> Found this on JB. http://www.smarthouse.com.au/HD/HD_DVD/J8T5Q8M5
> 
> So pretty much what I gather is, that they are going in favour of the HD DVD technology.
> 
> Hmmm, Blue-Ray versus HD. It is like Betamax versus VHS format war, we all know Sony lost that one despite having the technically superior product. I dont know what sort of impact this will have on the SP though.




I think over time it won't matter much - just wait for the inevitable multi format players/burners to come along. I won't be buying one untill then.

Interesting presentation yesterday from management, very upbeat for the future, share price up over a dollar on the news. Great trades!


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## Fed23

Does anyone have any explaination on why the SP has dropped so much in the new year? Anyone got any charts to show where the next level of support is or will it continue to free fall?


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## M34N

Fed23 said:


> Does anyone have any explaination on why the SP has dropped so much in the new year? Anyone got any charts to show where the next level of support is or will it continue to free fall?



I've had this one on my 'watch list' for some time, its had a fantastic run since the August correction, from < $10 to > $17 in 3 months. I would personally have to say a retracement back to the $11.00 mark, and that would probably provide some support, but if things keep getting worse in the US, I wouldn't be surprised to see it go lower than $10.00 again.

It's a speculative share thats been a real success story of the booming market, and as the speculative buyers disappear, these stocks get hit the hardest. I wouldn't honestly be invested in these kinds of stocks at these times, blue chips are where you'd want to be if you 'have to' invest.


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## nizar

Fed23 said:


> Does anyone have any explaination on why the SP has dropped so much in the new year? Anyone got any charts to show where the next level of support is or will it continue to free fall?




I try not to look for explanations coz even then it may not make sense.
The market can stay irrational longer than you can stay solvent.

So just have a stop loss and get out when the stop is hit, you can always get back in when the trend is up again.

Just my view.


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## Santob

So following todays announcements of sales, growth and profit up, and a payment of a dividend. Why has the share price dropped almost 7% this morning??


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## Fed23

SHARES in JB Hi Fi fell today despite the electronics retailer's higher first-half earnings report.

JB Hi-Fi stock was down 9.18 per cent or $1.16 at $11.48 by 1242 AEDT, after falling as low as $11.16 in morning trading. 

Austock senior client adviser Michael Heffernan said while company's interim results were good, its outlook was not as upbeat as investors would have liked. 

"Just goes to show that even when you exceed what people were expecting, they can still mark you down," he said. 

"It really gets back to the outlook statement, and unless that is really robust, then you get marked down." 

He noted that consumer spending was under pressure from rising climbing interest rates, higher petrol prices and global share market losses following the fallout in the US sub-prime mortgage market. 

"Maybe when the cooler heads prevail, we will see that today is a bit of a over reaction," Mr Heffernan said. 

JB Hi Fi reported a 60.23 per cent rise first half to 441.94 million and raised its full year earnings guidance. 

It now expects fiscal 2008 sales to be around $1.8 billion, compared to a previous forecast of $1.7 billion, representing a 40 per cent increase. 

Net profit is expected to rise by 41 per cent to 49 per cent to between $57 million and $60 million. 
Financial markets are currently pricing in about 70 per cent chance of another interest rate hike in March, following this month's 25 basis point increase to 7.00 per cent. 

"As retailers we can't do anything about the economy or rate rises so we just put our head down and tail up and do the best we can," JB Hi-Fi chief executive Richard Uechtritz said. 

"We have a product category that consumers want so I think that they will cut down on things like appeal and furniture before electronics. 

"We'll have some pain but not as much as the other retailers." 

For the six months ended December 31, sales increased to $989 million, from $659 million in the prior corresponding period. 

Mr Uechtritz said Christmas sales had been "very good" with categories like visual, games and computers showing solid growth. 

"Sales in January and February to date have continued the strong momentum of the first half of the year," he said. 

But Mr Uechtritz said the pace of sales growth was likely to slow, with the retailer having passed through 12 months of some of the strongest trading on record. 

Comparable store growth for the first half was 18.8 per cent. 

LINK: http://www.news.com.au/heraldsun/story/0,21985,23201471-664,00.html

I see this bouncing back tomorrow, hence why I jumped in. If you look at this why Australians like to buy gadgets anything technology related, RBA is scared of inflation becasue of over spending, JBH is a solid bet aswell with new stores opening up this year. Wish I just had bought at its lows 11.20 but I was out of the office


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## Santob

Yeah I chimed in, rather foolishly at opening of play, at 12.90 , here's hoping it comes back....

Whats that rule about waiting out the first hour or trading???


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## reece55

Fed23 said:


> SHARES in JB Hi Fi fell today despite the electronics retailer's higher first-half earnings report.
> 
> JB Hi-Fi stock was down 9.18 per cent or $1.16 at $11.48 by 1242 AEDT, after falling as low as $11.16 in morning trading.
> 
> Austock senior client adviser Michael Heffernan said while company's interim results were good, its outlook was not as upbeat as investors would have liked.
> 
> "Just goes to show that even when you exceed what people were expecting, they can still mark you down," he said.
> 
> "It really gets back to the outlook statement, and unless that is really robust, then you get marked down."
> 
> He noted that consumer spending was under pressure from rising climbing interest rates, higher petrol prices and global share market losses following the fallout in the US sub-prime mortgage market.
> 
> "Maybe when the cooler heads prevail, we will see that today is a bit of a over reaction," Mr Heffernan said.
> 
> JB Hi Fi reported a 60.23 per cent rise first half to 441.94 million and raised its full year earnings guidance.
> 
> It now expects fiscal 2008 sales to be around $1.8 billion, compared to a previous forecast of $1.7 billion, representing a 40 per cent increase.
> 
> Net profit is expected to rise by 41 per cent to 49 per cent to between $57 million and $60 million.
> Financial markets are currently pricing in about 70 per cent chance of another interest rate hike in March, following this month's 25 basis point increase to 7.00 per cent.
> 
> "As retailers we can't do anything about the economy or rate rises so we just put our head down and tail up and do the best we can," JB Hi-Fi chief executive Richard Uechtritz said.
> 
> "We have a product category that consumers want so I think that they will cut down on things like appeal and furniture before electronics.
> 
> "We'll have some pain but not as much as the other retailers."
> 
> For the six months ended December 31, sales increased to $989 million, from $659 million in the prior corresponding period.
> 
> Mr Uechtritz said Christmas sales had been "very good" with categories like visual, games and computers showing solid growth.
> 
> "Sales in January and February to date have continued the strong momentum of the first half of the year," he said.
> 
> But Mr Uechtritz said the pace of sales growth was likely to slow, with the retailer having passed through 12 months of some of the strongest trading on record.
> 
> Comparable store growth for the first half was 18.8 per cent.
> 
> LINK: http://www.news.com.au/heraldsun/story/0,21985,23201471-664,00.html
> 
> I see this bouncing back tomorrow, hence why I jumped in. If you look at this why Australians like to buy gadgets anything technology related, RBA is scared of inflation becasue of over spending, JBH is a solid bet aswell with new stores opening up this year. Wish I just had bought at its lows 11.20 but I was out of the office




Whilst I still think fundamentally they are expensive at this stage in the cycle, specifically in light of the interest rate environment, I closed my short out today for a 12% return for 7 days...... I think a few insto's will find this stock appealing at this levels in light of their financial performance record....

I would however like to commend JBH on their presentations - their CFO is really on the game, every key ratio disclosed and explained, it really is a pleasure to review their earnings releases, some of the best stuff on the ASX IMO....

Cheers


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## Buffettology

reece55 said:


> Whilst I still think fundamentally they are expensive at this stage in the cycle, specifically in light of the interest rate environment, I closed my short out today for a 12% return for 7 days...... I think a few insto's will find this stock appealing at this levels in light of their financial performance record....
> 
> I would however like to commend JBH on their presentations - their CFO is really on the game, every key ratio disclosed and explained, it really is a pleasure to review their earnings releases, some of the best stuff on the ASX IMO....
> 
> Cheers




Yep, I agree.

JBH is a GREAT company that I would LOVE to get my hands on and add it to my portfolio for the very long-term!  

But I unfortunately, think they are still fundamentally expensive.


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## dhukka

Buffettology said:


> Yep, I agree.
> 
> JBH is a GREAT company that I would LOVE to get my hands on and add it to my portfolio for the very long-term!
> 
> But I unfortunately, think they are still fundamentally expensive.




I agree this company is still on the pricey side but it is good to see some of prices of these retailers come back to earth recently. TRS and JST are a couple I have a close eye on and they are starting to look more attractive at current prices.


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## Buffettology

dhukka said:


> I agree this company is still on the pricey side but it is good to see some of prices of these retailers come back to earth recently. TRS and JST are a couple I have a close eye on and they are starting to look more attractive at current prices.




Yeh, they are still pretty expensive I beleive.  Including TRS and WOW.  I would want quiet a bit of a fall still before I would buy in.

JST is the only one I think is below fair value.  But its volatility scares the hell out of me, I buy in, then it plummets, only to save my skin several weeks later!  Im hoping the same happens again!


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## ZacR

Haven't heard too much on this bad boy for a while...

I know there is 'interest rates' 'petrol prices' etc etc affecting consumer spending, but in reality these things only affect 'stuggling' families.

What about all the young couples, professionals and singles out there that have to have the newest phone, tv, pc, stereo etc..?

I suppose WOW sight & sound is upping the ante so that could lead to further competition between the two...

Any one else have an opinion ?


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## Uncle Festivus

It a consumer discretionary stock which implies people don't really need what they sell. People are doing it hard so the XDJ sell off has probably been justified based on the possibility of reduced future earnings if a slowdown/recession unfolds?


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## Pigsy

Can't believe there's been no comment on JBH on here since March.  JBH one of the few stocks bucking the trend and pointing upward in this market.


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## Speewha

Hello, 

Most likely Pub talk but caught a whisper linking JBF and WOW.

post to short 


Regards


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## nomore4s

Pigsy said:


> Can't believe there's been no comment on JBH on here since March.  JBH one of the few stocks bucking the trend and pointing upward in this market.




Have had a couple of good trades in both directions with JBH lately.

Was a very strong day today considering it also went ex d/e today.


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## Sakk

I rarely look at Aussie Stocks however I was flipping through the ASX200 and noticed that a bottom reversal signal was triggered on the 15/08.  

A series of HH's and HL's, lower volume on the pullbacks add to the strength of the bottom reversal signal.


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## MRC & Co

Good one Sack.  I missed this one too, but would have been a very nice trade.

As you say, falling volume on the pullbacks, and high volume on the reversal day, sucking up the last of the sellers before printing a high close.


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## Pigsy

Can some explain this after market drop to me?
JBH closes today at 4:00pm at $13.87 then at 4:10pm after the adjustment the stock price closes at $13.59 with the most volume for the day of 268,000. Is this some kind of market manipulation?


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## J Nighttrain

*JBH - J B Hi-fi*

Any thoughts on this stock as it seems to have performed fairly well recently.
 am unsure if I should be getting in now, or waiting due to what is happening with the markets recently - Looks like a good medium to long term stock.
( newbie trying to learn the ropes)


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## jimmy_n13

My valuation for this using free cash flow is only about $6. Anyone care to help me realise where i stuffed up (if i have). This is with a terminal ROE of 15%


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## dhukka

jimmy_n13 said:


> My valuation for this using free cash flow is only about $6. Anyone care to help me realise where i stuffed up (if i have). This is with a terminal ROE of 15%




Hi Jimmy,

I don't use free cashflow to value companies but in terms of your ROE assumption it may be a little harsh given the company's return on equity is over 40% and has shown steady improvement over the last 6 or 7 years.


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## jimmy_n13

Cheers for the reply mate. I ended up adjusting some weak assumptions and got a target of around $11.70 (based on FCF, RIM, a few multiples and dividends)


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## Pigsy

What's gone wrong with JBH? Has been on a downward spiral for the last 7 sessions .... a new record for this company. Even when the allords is up this one is down. The fundamentals of this company are a lot better than the sp suggests. Is it the Aussie dollar having an impact. Although similar companies DJS and HVN has found support and aren't being smashed. Comments anyone?


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## Lachlan6

It seems there should be more pain to come for another once market darling - JBH. Wave equality between the wave's (A) and (C) suggests a high probability of $5.65 being reached. The question then is can the stock find some traction at those lower levels.


----------



## AS414

I would say this stock has much more upside than the gloomy market is pricing in at the moment.  The firms sells the right product for uncertain times (the software for staying at home and avoiding other temptations), and the firm is not over-everaged.  There is still room for it to grow in Australia and NZ.  It is a nice contrast to Harvey Norman who definitely have growth limitations domestically and a flawed internatioanlisation strategy.  See more here:

http://internationalbs.wordpress.com/2008/12/04/oh-harvey-oh-harvey/


----------



## ROE

I'm out of JB after I did scuttle butt lock in profit 
this is my story.

I did a fair bit of research and found what lowest possible price you can get for a certain products..arm with those prices I went to JB and negotiate a deal.. I know they can make money on the deal maybe not at the margin they want but still a profit never the less..

They wouldn't sale and I walk away I saw two people doing the same thing and walk away...

Now in time like these you need to lower your margin and get the sale and lock in the profit ..why forgo the sale? People dont have a lot of money to throw at you for a big margin.

so that is enough infor for me to get out .. I may be wrong but better out now then a profit down grade 

I'm going to try the same techniques on HVN if they do the sale.. I think JB could be a bad place to be in a recession.


----------



## justiceotp

What was the model number of the item and price you wanted to pay I'm in retail ill tell you if they should have taken it or not and if someone else does is it at a loss of margin just to lower stock levels.


----------



## investorpaul

Anyone else currently following this stock?

It hit $14 in August/September before crashing back down to $7 to $7.50 in Nov 08.

It has hit $14 again in May and currently sits at approx $12.50, were there seems to be a bit of support. There is definitely strong resistance at $14 and i dont see it breaking through that level with ease/any time soon, especially seeing as the governments cash hand outs will work there way out of the system and wallets will tighten.

For me a close below $12 will represent a shorting opportunity.


----------



## rustyheela

Course they are not going to make a deal if you haggle cause probably means you want it near cost price taking into account A$$ fluctuation / rallying. if you walked away from JB HIFI then HVN wont be cheaper. By it on the net and save 10 -20 %!! 

P.S Kevvy rudds paying for a portion of it!!


----------



## johannlo

ROE are you saying that your opinion of whether to buy, hold or sell this stock is based on your single poor experience of trying to do one of those price matching deals? i.e. you received poor service from retail staff at a single location, on the kind of deal that EVERY company tries to weasle out of. 

No mention of technicals, or fundamental analysis, just you got poor service on one occasion so thus the company is stuffed?

Also isn't your logic a bit upside down - surely other plausible explanations are
- they have so much money they don't need to scrap for every last low margin transaction
- you lucked upon crappy retail staff (what are the chances?)
- staff are held to ironclad 'no sales below X% markup' rule, believe it or not its quite common practice in retail industry. 

let alone any kind of attempt to correlate this SINGLE statistical occurence to any form of causation (i.e. technical analysis, fundamentals analysis, heck wider reading of retail market sentiment).

Sorry not trying to be aggressive but it really does come across as 'i've had one bad experience so I'm going to rubbish this stock'. I'm pretty sure that you could duplicate that experience amongst a heck of a lot of other companies, of which some could be very good buys from either a trading or fundamentals point of view.

For what its worth I wouldn't enter into this stock given this sector (retail), at this price and this stage of economic uncertainty.


----------



## rustyheela

from a technical point of view i bought in the other week when support at @.$12.02 held ( pretty solid line ) but as usual running pretty tight stop if volatility or more downside is an issue. I have been watching this stock for a bit  and its quite predictable at this point in time, having said that i will look foolish by end of week!!! guess from a T.A perspective you can only go by what the chart in front of u is saying !!!


----------



## voyz

does anyone think jb will break through the $14 mark considering yesterdays great performance?
or is it retesting the highest high twice for no reason?


----------



## deedeeramone

I went to buy a video camera on the weekend. I started my search in JB Hi-Fi (JBH) because I've always found the staff to be knowledgeable and have good deals. The camera I want was listed at $398 and the sales assistant said they could do it for $367. He was not at all knowledgeable or helpful.

I got out of there and ended up buying the identical camera up the road at Harvey Norman (HVN) for $333. This included a bonus carry bag and battery. The girl there was very helpful and did know her stuff.

Certainly this could be a one-off experience and I'm cautious about reading too much into it.

But for the first time in 7 years I'm feeling bearish about JBH.

Anyone have any other similar (or contrasting) experiences they can share?


----------



## skc

deedeeramone said:


> I went to buy a video camera on the weekend. I started my search in JB Hi-Fi (JBH) because I've always found the staff to be knowledgeable and have good deals. The camera I want was listed at $398 and the sales assistant said they could do it for $367. He was not at all knowledgeable or helpful.
> 
> I got out of there and ended up buying the identical camera up the road at Harvey Norman (HVN) for $333. This included a bonus carry bag and battery. The girl there was very helpful and did know her stuff.
> 
> Certainly this could be a one-off experience and I'm cautious about reading too much into it.
> 
> But for the first time in 7 years I'm feeling bearish about JBH.
> 
> Anyone have any other similar (or contrasting) experiences they can share?




Walking the mall is one of Buffet's favourite research tool.

I shopped for a laptop last year (thanks K Rudd for his investment tax benefits) and ended up buying one from Harvey Norman to my great surprise.

JB didn't carry the model I was after, which was one of the best sellers in Asia. Harvey was able to offer a deal with some software and warranty. The staff in JB were OK, but the guy in Harvey was amazingly helpful. That was the most surprising aspect of it.

Having said that, the staff at the homeware department of Harvey are pretty average to say the least. And if I walked away with a great deal, chances are their margins just got smaller... so think twice before hitting that trade button.


----------



## justiceotp

I'm a retailer and that is currently the way the market is everyone is just undercutting everyone at the expense of profit. What is the model of the Camera you bought just so I can get an idea of the profit left in the sale if any.
Also did you tell the Harvey person the price you where offered at JB as each retailer will always undercut if they know the price. The other thing you need to question is did you sales person just give away more margin than required if they do that constantly is that good for the bottom line?


----------



## deedeeramone

JVC Everio SD Card Video Camera

Silly old aussiestockforums won't let me post a link so you'll have to copy-n-paste yourselves:

harveynorman.com.au/product/1255509273838/jvc-everio-s-video-camera

I told the JBH guy the price at HVN and he said they couldn't match it.

I now have two bearish thoughts about JBH that I can't shake:


JBH no longer felt like the "cool / underground" place to shop. For the first time it felt like any other electronics retailer. My assistant was just trying to close the deal asap.
Where is JBH's future growth going to come from? Australia's pretty well covered now. NZ can't add much.


----------



## McCoy Pauley

deedeeramone said:


> I went to buy a video camera on the weekend. I started my search in JB Hi-Fi (JBH) because I've always found the staff to be knowledgeable and have good deals. The camera I want was listed at $398 and the sales assistant said they could do it for $367. He was not at all knowledgeable or helpful.
> 
> I got out of there and ended up buying the identical camera up the road at Harvey Norman (HVN) for $333. This included a bonus carry bag and battery. The girl there was very helpful and did know her stuff.
> 
> Certainly this could be a one-off experience and I'm cautious about reading too much into it.
> 
> But for the first time in 7 years I'm feeling bearish about JBH.
> 
> Anyone have any other similar (or contrasting) experiences they can share?




I've had experiences consistently with JB Hi-Fi over the past 5 years which indicates that customer service does not appear to be high on the list of priorities of the executives running the company.  Routinely, I've had to go hunting for people to help me with a query or a product sale.

The most recent occurrence was about 18 months ago when I was looking to purchase a present for my wife for Mothers Day.  Despite a number of customer service staff present in the area of products I was interested in, not one offered to assist me.  I walked out of JB Hi-Fi and bought the same product (cheaper) at Myer.

I haven't shopped at JB Hi-Fi for years now, I reckon.  I think the culture changed when the company listed.

Disc - do not own shares in JBH.


----------



## ROE

I used to buy my electronic stuff from JB but lately I found them no longer 

competitive and they dont drive a hard bargain any more and their staffs

quite arrogant when we get down to price negotiation.

Too much success lead to complacency.

I thought I was the only one feeling that way but the culture may have changed.. I now shop at the good guys and these guys do want my business and try to make an effort selling at a decent price...and officeworks always has lower price on HDD and whatever else they stocks in electronics
and accessories


----------



## justiceotp

OK to fill you in then JB HiFi did a shocking job that is a bonus is supplied by JVC to the retailer to give to you free with purchase, but if HN didnt inform you of the extra bonus Ipod dock sound system via redemption then they didnt do much better but did get your sale. go to www.jvc.com.au to claim your dock after you pay $20 freight and also your extra 1 year bonus warranty.


----------



## condog

Sorry guys but i dont think the rest of Australia agrees with you....

Its the fastes grwoing retail chain in australia...it powered through the GFC ...

Go into any westfield and JBH is the busiest store by more then double...


----------



## McCoy Pauley

I think JBH does a good job at marketing itself to Gen Y shoppers and gets them through the door day after day.  JBH does well in selling DVDs and CD-ROMs, but for any entertainment product, I'd look elsewhere (Good Guys is a good place to start, in my experience).

I haven't experienced this personally, but I'm aware of a number of different people that have had bad experiences purchasing goods from JBH online (ie., goods that have never shown up).


----------



## condog

I hear what you say, but i purchase a truck load off them and couldnt be happier....  in fact the only thing i hate is there stores are so busy that i have to wait in line for the checkouts....

So lately i do a lot on line...when they have music and dvd specials... got an awesome 15' new hp dual core laptop for $491 just after xmas from jbhifi online... and now scanning to try and find another one pop up for that price or similar...for the kids...

I love em and i think the numbers tell the story......  any way each to there own... certainly as a stock its a fantastic stock to own.....from a fundamentals point of view it is sensational, and right now as ive calced it its also $2 under value.... low div, but thats calced in to my value....and when they keep giving approx 20% p.a. compound sp growth ... a 1.5-2% dividend is very acceptable....  theres stillplenty of store roll outs happening and store sales are still increasing....while costs are being maintained and in a lot of cases lowered...

DYOR this is all opinion...seeek expert advice...


----------



## justiceotp

The thing you have left out is the MARGIN it has decreased dramatically in December. They have indicated they are going to remove themselves from GFK figures so you wont be able to get market share figures anymore probably been the major driver of share price. Its not always the best thing to grow the number of stores especially if the existing stores start to reduce the amount of profit they are generating, remember new stores are usually a drain on your costs even at the best of times.


----------



## DocK

McCoy Pauley said:


> I've had experiences consistently with JB Hi-Fi over the past 5 years which indicates that customer service does not appear to be high on the list of priorities of the executives running the company.  Routinely, I've had to go hunting for people to help me with a query or a product sale.
> 
> The most recent occurrence was about 18 months ago when I was looking to purchase a present for my wife for Mothers Day.  Despite a number of customer service staff present in the area of products I was interested in, not one offered to assist me.  I walked out of JB Hi-Fi and bought the same product (cheaper) at Myer.
> 
> I haven't shopped at JB Hi-Fi for years now, I reckon.  I think the culture changed when the company listed.
> 
> Disc - do not own shares in JBH.




I have had the opposite experience.  Went to buy a new TV and PVR from Harvey Norman and must have got the worst salesman alive.  He knew less about his products than I did (which wasn't heaps) and constantly interrupted either us or himself to wave at friends, talk to other staff etc.   We then went to JBH where a young guy was very informative, polite, helpfull and we negotiated a better price than at HVN.  

I have received good service and prices at both stores in the past, but find at Harvey's it's a bit hit and miss depending upon which section you're shopping in, or maybe just the particular salesman you deal with (when you can manage to grab one).  In my area Harvey's salesstaff are mainly late 20's to middle-aged and dress conservatively, whereas JB staff are mainly young and tattoos etc are almost mandatory.  Maybe it's just me, but if I want a fridge, washing machine etc I'll head to Harvey Norman, but if I want techno stuff you can't beat the youngsters for knowledge.  The kids use it, know it and can explain it better I find.

Don't own shares in either atm, but had a lovely run with JBH for a while


----------



## Uncle Festivus

It's all about margin I think. JBH used to be the most expensive from my dealings with them, hence the good profit/growth over the last few years? I think the scene is different now with cut throat competition on threadbare margins ie bought a PVR from Myer recently for $895, all others were qouting $1195, JBH didn't want to even haggle.

On a peer/index basis, JBH is fully valued? Clearly in downtrend?


----------



## McCoy Pauley

DocK said:


> I have had the opposite experience.  Went to buy a new TV and PVR from Harvey Norman and must have got the worst salesman alive.  He knew less about his products than I did (which wasn't heaps) and constantly interrupted either us or himself to wave at friends, talk to other staff etc.   We then went to JBH where a young guy was very informative, polite, helpfull and we negotiated a better price than at HVN.
> 
> I have received good service and prices at both stores in the past, but find at Harvey's it's a bit hit and miss depending upon which section you're shopping in, or maybe just the particular salesman you deal with (when you can manage to grab one).  In my area Harvey's salesstaff are mainly late 20's to middle-aged and dress conservatively, whereas JB staff are mainly young and tattoos etc are almost mandatory.  Maybe it's just me, but if I want a fridge, washing machine etc I'll head to Harvey Norman, but if I want techno stuff you can't beat the youngsters for knowledge.  The kids use it, know it and can explain it better I find.
> 
> Don't own shares in either atm, but had a lovely run with JBH for a while




Yeah, I'm not a fan of Harvey Norman either.  Their customer salespeople are generally, on the whole, not very knowledgeable about their products and their prices always seem to be very high.  They always push their no interest free deals which must account for a high proportion of their sales.

I generally get our electronics and white goods from the Good Guys and, very occasionally, Clive Peeters.


----------



## lianeisme

I am not a fan of Harvey Noman either I currently hold JB Hi Fi. Stock I bought the stock because I liked their business model.
I personally have found them to be a much more interesting shop and have always got great deals.  I usually buy white goods from the Good Guys or Clive Anthony.
In regards to service I think all shops in Australia need to pull their socks up whether it be K Mart, Target , Myers, David Jones and so on we are the worst in the world for service. All shops appear to be understaffed and the staff are disinterested.
I have found Harvey Norman to be very hard to deal with if you have faulty stock or to return product that is not suitable. Because of this I don't buy anything that can break from them. I use them as my base to start to get the best deals.

I was wondering as a stock where you all think JBH is going to go over the next two years, it appears the stock brokers are very bullish in regards to them however their price per share in comparison to their competitors is substantially different. What is your opinion?


----------



## skip9

While i dont own JBH stocks, i have been watching for a long time. 
Personally i think they will continue to grow, not at the rate as they have but slow and steady. I am pretty sure they are opening another 50 odd stores in June this year.


----------



## condog

I subscribe to a valuation service that charges me a lot of money to value these comnpanies ...it has JBH presently valued at $23.50 and thats based on July 09 trading figures.....i expect a re valuation very soon , with 6 months good trading under there belt and little dividend to rob the growth on this one...

No matter what criterea other then Yield i filter for good results, JBH comes out in the top few performing big busineses that i can find....

Also Roger Montgomery who i very much respect, but who is also a very conservative expert valuer on these types of busines absolutely loves JBH and has it valued at $23 this year, $28 next year and $33+ the following year....

Sorry to be blunt and i hope no one is offended, but seriously other then a low yeild, the merits of JBH as a good investment do not warrant at present any questioning.....


----------



## So_Cynical

condog said:


> Sorry to be blunt and i hope no one is offended, but seriously other then a low yeild, the merits of JBH as a good investment do not warrant at present any questioning.....




Chart looks very toppy to me, JBH certainly has had a great run and was value, but its hard to see it continuing to go up at the rate it has over the last 12 months....falling volume and the crappy dividend yield point to sideways movement over the next 12 months IMO.

Besides as others have commented on...JB HI-FI seem to be everywhere now and can be considered as just another electronics retailer that has a better than average range of music and videos...i know some people love charts that look like this, i hate em cos all i see is where i should of brought, anyone buying now has clearly missed the boat.
~


----------



## condog

No doubt growth will be more subdued going forward, thats nearly always the case that growth cannot be replicated as well in mature companies.....but that does not mean that long term good growth will not be achieved....
Clearly when JBH started out it got to put its stores in all the finest locations ...and now with stores approaching 120ish or so its got good targets for 160 stores and aims to go to 200 stores....beyond that surely growth will taper as store locations become lower quality.....but thats about 3-4 years away...

Take a look at these graphs which are from the AGM in OCT 2009 and do not include the wonderfull xmas trade they just had and then honestly  tell me they are doing something wrong....

Other then tiny speccies with higher risks - no one in here would have a mid cap that has done so consistently well.......and if you claim you do please include a picture of its graph...


Im not sure about you but thats an OUTSTANDING result and beyond questioning by anyone.....

The above graph shows its not just another electronics store...HVN has nothing like the growth, not even remotely close.....HVN had a good year this year due to the Rudd Plasma money, but thats about it.....on the flip side JBH has a string of fantastic, outstanding results and more to come...

Dividend of 44c up 69%....now thats a good increase as well....but  JBH achieves and ROE of approx 48% so why would you want it to pay you the money in dividend....when it can get 40% on your money for you....
When its rolling out 20 odd stores a year and continueing to achieve 40% roe I would like it to keep every cent....

And with a rapidly expanding population to 39M things are likely to be better..

Honestly anyone bagging JBH for its coorporate performance has no idea what a good investment is....debate is fantastic, but please do some research if you claim to know stuff, otherwise ask and you shall recieve...


----------



## condog

Further people in here have falsly or naively claimed JBH is losing its competitive edge...this is false

It lowered its CODB from 15.3% to 14.9% and is an industry leader in this by over 4% and  importantly at the same time its EBIT and NPAT increased significantly...

Unlike the other electronic retailers JBH has a focus on personal enetertainment and has selective product offerings within this category....Most other chains offer the full sweet of electronics including brown and white goods which have lower margins and are far more susceptable to economic cycles....

Hence the reasons why JBH is extremely different and far more profitable...they are a smarter business, with a better business model and are far more profitable....

JBH has recognised and targeted personal enetertainment, because it is now almost a necessity in most households....in terms of weekly budgets personal entertainment is the fastest growing area of spending....

I never fall in love with any stock, it owes me nothing, but from a fundamental view point JBH is a super star performer.........and nothing in its immediate outlook thats under the companys control  is likely to change that....


----------



## skc

condog said:


> Further people in here have falsly or naively claimed JBH is losing its competitive edge...this is false
> 
> It lowered its CODB from 15.3% to 14.9% and is an industry leader in this by over 4% and  importantly at the same time its EBIT and NPAT increased significantly...
> 
> Unlike the other electronic retailers JBH has a focus on personal enetertainment and has selective product offerings within this category....Most other chains offer the full sweet of electronics including brown and white goods which have lower margins and are far more susceptable to economic cycles....
> 
> Hence the reasons why JBH is extremely different and far more profitable...they are a smarter business, with a better business model and are far more profitable....
> 
> JBH has recognised and targeted personal enetertainment, because it is now almost a necessity in most households....in terms of weekly budgets personal entertainment is the fastest growing area of spending....
> 
> I never fall in love with any stock, it owes me nothing, but from a fundamental view point JBH is a super star performer.........and nothing in its immediate outlook thats under the companys control  is likely to change that....




Great historical analysis condog. Thanks for sharing. 

I don't think anyone can argue about the historical performance of JBH. And history is often a good guide to future performance as well. People have merely pointed out some anecdotal evidence of whether shopping at JBH is a pleasant experience or not. This may or may not be significant, but management and investors should ignore customer feedback at their own peril.

Having said all that, all these figures don't conclude whether JBH is a good investment *at today's prices*. I think everyone agreed that the growth cannot continue forever. If the current valuation is based on similar growth for another 5 years and flatter growth thereafter, then that seems fair. If the valuation is based on 40% growth forever then I will get a bit skeptical. 

Here's my back of envelope valuation.

Current EPS = 88c. Say 2 years of 40% growth followed by 3 more years of 20% growth. Year 5 EPS ~$3. As growth is slowing, market may only apply a PE ~16 (Something like a DJS multiple), this gives a share price of $48 in 5 years. Discount $48 back by 12% to today's dollar makes ~$27. So today's price of $22, on these assumptions, are not overvalued. It is up to the individual investor to decide whether these growths are attainable.

In fact at current price of $22, market is pricing ~22% EPS growth for the next 5 years and PE ~16 thereafter. To me this doesn't sound ridiculous based on their performance record.


----------



## condog

Its value as an investment was called into question very clearly......and its the one stock all the commentators and analysits agree is the darling of the market.....especially looking forwards.......

All I say to the punters is DYOR and make your own decisions, but JBH IMO and in every analyst i have heard comment , every fundamental valuers opinion a great stock....

The figures above show it, the declining CODB, show it, the NPAT and EBIT confirm it......the continual profitable store roll out says it...

What more does anyone need say???????


----------



## justiceotp

> "Unlike the other electronic retailers JBH has a focus on personal enetertainment and has selective product offerings within this category....Most other chains offer the full sweet of electronics including brown and white goods which have lower margins and are far more susceptable to economic cycles...."




They do browngoods TV's are the worst margin in all browngoods and if they don't do whitegoods who owns Clive Anthony, better do some more research.


----------



## bluemoon

Interesting reading....
What state are the JBH stores that people find sales people arrogant or prices not competitive enough???
Perhaps email JBHfi management with concerns - it can only help them...

I LOVE JBH.  Am not a holder of stock currently as have been watching it rollover lately.  But it is still my pick of the whole retail space. Tech chart - Macd just showing a buy on daily chart now so I may have to re-enter JBH soon.

In regard to my dealings with HVN MYer and JBH and Kathmandu as a comparison this xmas... Perth WA.

Myer IMPOSSIBLE to get a cashier to pay at Cannington shop - really bad and staff under pressure - (even crying) over xmas time.  Since the IPO  heaps more discount offers with MyerOne card than ever before and prices more competitive this xmas. Had 20% day even. I bought there over xmas time although left in disgust at staff levels one occasion.

JBH - young sale people - got heaps help re:laptops Cannington, Perth staff.  Far better staffing levels than Myer over xmas and really helpful staff. Bought there over xmas - best dvd game selection for my teenagers at home.

HVN - don't go there except furniture. Too expensive in my experience and not willing to deal.  Did not purchase there this xmas.  

Kathmandu - best for decent sweatshirts that last a lifetime. Bought vest xmas time. 
Summary....
MYER best cut prices this year and 'old mans pants' retailer (BOUGHT CLOTHES FOR MY OLD MAN THERE). 
JBH best DVD and gen y retailer.


----------



## condog

justiceotp said:


> They do browngoods TV's are the worst margin in all browngoods and if they don't do whitegoods who owns Clive Anthony, better do some more research.




Please read in context...JBH focus on personal entertainment....while most other retailers have the full suite of white and brown goods.......ie: with no specific focus on personal entertainment

Regards to clive anthony - it is an insignificantly small part - I have doen my research champ.....

Fact is I cant think of one analyst, commentator or journalist whos brave or silly enough to have even cast any doubt over JBH performance..... 

Take - Roger Montgomery the king of valueing businesses (way to conservative, but well if theres a bad thing about a business he will find it) only has 6 stock in his portfolio.....guess what his number 1 pick is.....JBH.....And hes a million times more qualified at selecting great fundamental businesses to invest in then any one in here....

Rather then look for some insignificant literary error which you will find plenty in my typing or some contextual expression error on my behalf.....why not add some oomph to your doubts by providing data / facts / graphs to the contrary.......for cross examination....that would really add to the intellectual grit of this conversation...perhaps you could provide some real data of JBH performance slipping in some area.....


----------



## McCoy Pauley

29% increase in net profit for the first half of 2009/10.  Net profit rose to $76 million in the first six months of the financial year, up from $59 million in the corresponding period in 2008/09.

http://news.theage.com.au/breaking-...ls-record-half-year-profit-20100208-nlcx.html


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## tone76

Looks like the news of Richard Uechtritz stepping down from the top job at JBH has overridden the news of record profits: JBH has been slammed this morning (down > 6% last time I looked).

Surely Terry Smart can't be that bad an operator...?


----------



## condog

tone76 said:


> Looks like the news of Richard Uechtritz stepping down from the top job at JBH has overridden the news of record profits: JBH has been slammed this morning (down > 6% last time I looked).
> 
> Surely Terry Smart can't be that bad an operator...?




Richard has been the undisputed king for a couple of years now....so anyone was likely to dissapoint the market..... makes for good buying in my opinion.... ....think about it for a moment.... a fantastic company with 28% increased profit on an already awesome ROE and undervalued stock, just got 6% cheaper for no legitimate reason other then its handed its winning formula to a new chief....

Surely the market will realise its own stupidity in coming days...

Further Richards stayin on as a consultant and will rejoin the board in 2011

Disc- I hold, want more may sell etc....
DYOR and seek expert advice


----------



## Miro

condog said:


> think about it for a moment.... a fantastic company with 28% increased profit on an already awesome ROE and undervalued stock, just got 6% cheaper for no legitimate reason other then its handed its winning formula to a new chief....
> 
> Surely the market will realise its own stupidity in coming days...




JB Hi-Fi an a stunning business, no doubt about that. However, the fact is already priced in the share price. According to the latest report the return on equity is not going to be as high as predicted in the previous report, so makes sense to expect the share price to decline.

It doesn't matter whether the profit is a 30% increase or 10% decrease. You often see shares increasing based on decline in profits that are lower than expected. The share price does what it wants to do based on investors' expectations.


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## bazuka

Enter the Ipad and 3D TV, I can see the next few months going very well for JBH!
I bought shares back when they were 9 ish and sold recently when they got above 20c, I'm thinking it may be time to buy again.


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## robusta

A couple of interesting notes in the annual report :

"... In the absence of having strong investment opportunities, it is the view of the board that we should return excess cash and franking credits to shareholders. In light of the volatility of recent trading we believe it is prudent to defer any such activity until after the important Christmas season."

"...the company has migrated from a net investor of cash to a net generator of cash."

I would be interested in anyones thoughts, increased payout ratio? bonus dividend? share buyback?


----------



## drlog

From what I can see, they are planning on increasing their payout ratio in the future because they simply can't continue their high organic growth. Having said that, there is still some good growth left for JBH but it won't be as high as it was previously. The semi-good news is that shareholders will receive higher dividends. The bad news is that the growth will be lower.


----------



## So_Cynical

drlog said:


> From what I can see, they are planning on increasing their payout ratio in the future because they simply can't continue their high organic growth. Having said that, there is still some good growth left for JBH but it won't be as high as it was previously. The semi-good news is that shareholders will receive higher dividends. The bad news is that the growth will be lower.




LOL can it be true....a growth stock that stops growing. surely growth stocks just keep on growing for ever!


----------



## drlog

I don't classify JBH as a "growth stock", I classify it as a "good business". :


----------



## Tukker

So missed its sales target by a bit and price drops 12% in a few weeks.  I am on the good business boat with this fella looking for an entry point. 

Watching.


----------



## robusta

Tukker said:


> So missed its sales target by a bit and price drops 12% in a few weeks.  I am on the good business boat with this fella looking for an entry point.
> 
> Watching.




Could not agree more, hope JBH gets a bit cheaper so I can buy some more.


----------



## ers_6

whats everyone's thoughts on an entry point?

any technical investors that can give us your thoughts?


----------



## ROE

robusta said:


> Could not agree more, hope JBH gets a bit cheaper so I can buy some more.




There is no denying JBH is a good business 
couple of things to consider before you load up more JBH

1. Richard stood down Terry stand up, first year in the job
    miss sale target... I seen plenty of these happen in other company, this may not be the first.. Infact I go as far as saying Terry can never match Richard performance from the research I do on this stocks

2. Good guys and WOW Sight & Sound backed by NAB capital start to compete heavily and expanding their business fairly aggressively make a hard case for JB to expand and get the same historic return on capital.

Good luck for those who lock and load of more


----------



## takestock

robusta said:


> Could not agree more, hope JBH gets a bit cheaper so I can buy some more.




I bought some more,just hope that another anal yst doesn't dump on JBH like the Credit Suisse researcher did the other week.


----------



## skc

Negative spotlight on retail sector as a whole is doing no favour for the JBH share price. It's now sitting very dangerously at support. Unless the overall market goes full steam ahead (which it may do), it will probably break on the down side imo.

Next support not too far at $17, followed by $14 if it does a TRS.

I was at JB last night and there were plenty of people in the shop. But the lines were shorter than I remembered them to be a few months ago. Only waited for 2 people at the checkout line as opposed to the usual 8 or 10. Especially pour given the time of the year...


----------



## So_Cynical

skc said:


> Negative spotlight on retail sector as a whole is doing no favour for the JBH share price. It's now sitting very dangerously at support. Unless the overall market goes full steam ahead (which it may do), it will probably break on the down side imo.
> 
> Next support not too far at $17, followed by $14 if it does a TRS.
> 
> I was at JB last night and there were plenty of people in the shop. But the lines were shorter than I remembered them to be a few months ago. Only waited for 2 people at the checkout line as opposed to the usual 8 or 10. Especially pour given the time of the year...




JBH headed for $15 without a doubt...margins wafer thin, discretionary spending under pressure, internet (GST free) competition, 20 or so more days of Xmas spending then the reality of consumers that already have all the latest crap and more IR pressures ahead.


----------



## takestock

Yep I'm selling before my loss increases.It's been disasterous I just don't see any upside.
I 've never gone into retail stocks and this is a harsh lesson to me.


----------



## Intrinsic Value

takestock said:


> Yep I'm selling before my loss increases.It's been disasterous I just don't see any upside.
> I 've never gone into retail stocks and this is a harsh lesson to me.




I wouldn't  be so hasty  about  dumping them  just yet.

The picture is   still very good for the future.

I think the new year will see a spike in their share value.


----------



## drlog

Intrinsic Value said:


> I wouldn't  be so hasty  about  dumping them  just yet.
> 
> The picture is   still very good for the future.
> 
> I think the new year will see a spike in their share value.




Do you mean spike in share price or value?

I think they are undervalued right now by around 15% and if they fall below $17, I will definitely buy more. Currently, JBH is my worst performing stock but it's a quality company that is growing - no way would I dump it!

Thinking medium term (next calendar year), I expect the share price to recover upwards of $20.


----------



## Intrinsic Value

drlog said:


> Do you mean spike in share price or value?
> 
> I think they are undervalued right now by around 15% and if they fall below $17, I will definitely buy more. Currently, JBH is my worst performing stock but it's a quality company that is growing - no way would I dump it!
> 
> Thinking medium term (next calendar year), I expect the share price to recover upwards of $20.




I think 15% undervalued may be about right. 

I certainly wouldn't dump them hastily at this stage. 

I probably wouldn't buy them yet either as you say if they went down to under 17 they would represent a significant investment opportunity.

BTW I don't hold JBH but wish i did.


----------



## VSntchr

Jb having a bit of a run over the last 2 days. Sentiment may have improved with the latest retail figures perhaps.

Glad I got in at a nice discount to IV a few weeks ago.


----------



## drlog

VSntchr said:


> Jb having a bit of a run over the last 2 days. Sentiment may have improved with the latest retail figures perhaps.
> 
> Glad I got in at a nice discount to IV a few weeks ago.




Yeah, I wish I had bought in but I had a strict buy price of $17, no more. I think you got a great deal, as your name suggests, VSntchr 

It will be very interesting to see their half yearly report.

Holding.


----------



## Intrinsic Value

drlog said:


> Yeah, I wish I had bought in but I had a strict buy price of $17, no more. I think you got a great deal, as your name suggests, VSntchr
> 
> It will be very interesting to see their half yearly report.
> 
> Holding.




My intrinsic value for JBH for 2012 is around 30 dollars. That doesn't necessarily mean it will get there but I think it still represents good value at current market prices.

I also rate Oroton quite highly as well if you are looking at retail.


----------



## VSntchr

drlog said:


> Yeah, I wish I had bought in but I had a strict buy price of $17, no more. I think you got a great deal, as your name suggests, VSntchr
> 
> It will be very interesting to see their half yearly report.
> 
> Holding.




Yeah, similarly to you, my target was $17.50. I wouldnt be suprised if you are a given an opportunity at your price...Im prepared to buy more if thats the case  

Alot of half yearly reports are going to be especially interesting this year.
In particular the retailers, I wonder how they really went over the xmas period...


----------



## Noddy

Bought in recently at $17.70 as a medium term hold. Stock dithered a bit then moved up in the last 2-3 days to sit at $18.25. Quite happy about that.

Have calculated a value of around $21.00 or so.

Think that JBH is a top line retailer. Everytime I go there, have to queue up to hand over my money. The staff seem to be very switched on, but some of them are cutting edge in their appearance IMHO.

Also holding DJS bought around the same time. Also doing well.

In my view JBH and DJS are the pick of Australian retailers. Have traded them both a number of times and always turned a profit with them. Like it when their price falls, sets up a buying opportunity.


----------



## VSntchr

HY11 report out today. Thoughts or comments anyone?

Results seem pretty good considering the media hype sparked by Gerry Harvey...


----------



## drlog

VSntchr said:


> HY11 report out today. Thoughts or comments anyone?
> 
> Results seem pretty good considering the media hype sparked by Gerry Harvey...




I only looked at the presentation - it looks good but not great. I think everyone was expecting retail doom and gloom so the SP is up today on the "good" news.

They are still trading slightly below IV I think.


----------



## Noddy

Noddy said:


> Bought in recently at $17.70 as a medium term hold. Stock dithered a bit then moved up in the last 2-3 days to sit at $18.25. Quite happy about that.
> 
> Have calculated a value of around $21.00 or so.
> 
> Think that JBH is a top line retailer. Everytime I go there, have to queue up to hand over my money. The staff seem to be very switched on, but some of them are cutting edge in their appearance IMHO.




Record sales, profit and dividend.
Paying 5% ff.
Very happy with that.
Bought some more.


----------



## ROE

wow pretty good result I was expecting a flat to 5% increase in earning

but same store sales decline so most of their earning come from opening more stores
and more efficient

if those same store sale don't pick up could be bad in the future...

If JB delivers similar grow in the next 2 years then I'm dead wrong on JBH  and 

opportunity missed.


----------



## fanger

The share price has been disappointing after a strong earning results. 

Retail stocks are on the outer with the market in general


----------



## ROE

fanger said:


> The share price has been disappointing after a strong earning results.
> 
> Retail stocks are on the outer with the market in general




I have doubts  JB can sustain this grow rates about 6 months ago
and I may prove to be wrong but I wont accept defeat after 2 years.
it takes time for stuff I spot to build momentum..

JB is a good business I have no doubt but I don't think it's cheap
It has to sell a lot cheaper than current price for me to buy 

the way it doing business, it is the most efficient of them all 
so there is no room for it to go any lower from here on...
so the only way is up in term of cost is up.

Their model of selling CD, Games, Camera and stuff there is no way they
can beat parallel import and online operators...

Apple already announce they ditching box software sell, they going to
do download model only via itunes, music and games and movies will follow this path

JB can be easily out price by the online shop at significant discount.
Once people has Flat screen TV, how often do you go back and buy another one?
there will be tech savvy who want the latest stuff but this population is small

I have LCD TV, 4 years ago I wont get another one till it broke

Internet commerce may start out 10 years ago but this is the year where
momentum pickup and it will accelerate going forward...

you only look to the US market to see where the sale is going
internet sale grow double digit each year, brick and mortal flat or backward...

I watch chairman interview on lateline and I'm not convince with his answer on
the Internet strategy...he kept comparing JB to Internet 10 years ago...
back then people dont have broadband, smartphone, iPad and iPhone doesnt exit

2010 and 2011 is a new era, Internet power almost every single home ...
you get speed 10 times you get 10 years ago...and this speed will increase each
year with newer technology

I haven't bought anything from brick and mortal store for the last 15 months
I didn't do that 2 or 3 years ago...

Camera I get online 40% cheaper, Music download, Games download via Steam
even bought my furniture online and deliver for $50 and 25% cheaper than Harvey Norman.
I give you an example a Panasonic Lumix Camera I bought it online

http://www.jbhifi.com.au/photo/digi...mp-12x-optical-zoom-digital-camera-sku-51968/
http://www.dwidigitalcameras.com.au/store/product.asp?idProduct=2481	($200 buck cheaper)

I say Internet model can do more damage to JB than HVN due to the fact JB stocks stuff that can easily bought online for much cheaper...

and remember store by store comparison they going backward
so that telling me less and less people are shopping in older stores
or more  move online..

Internet will co-exist with the brick and mortal store and it wont kill them
but you got to factor this into the price you pay for retails.

good luck to existing holders  I stay put until Internet Sales threat is factor
into the price....


----------



## drlog

ROE said:


> Camera I get online 40% cheaper, Music download, Games download via Steam
> even bought my furniture online and deliver for $50 and 25% cheaper than Harvey Norman.
> I give you an example a Panasonic Lumix Camera I bought it online




You have an excellent point there - I hold JBH so tend to go there for the things they sell. I wanted to buy a DSLR recently so I looked online first then went to JBH. The price difference was about 40% and I can assure you that online is cheaper than what JBH can buy it for wholesale. Canon and the other camera manufacturers know that Australians are affluent and therefore charge a LOT more here. I ended up buying my 550D online: the instruction manual is in Malay and it is called a Kiss X4. I know how to use SLRs so that isnt a problem for me.

Cheaper online is not always the case though - Bioshock 2 on steam was $10 more than at JBH and in USD making it about 10% MORE online compared to JBH. Of course, sometimes steam has sales which will always beat JBH.


My point? Three fold:

- The fact that online is cheaper is not the retailers fault and it is not the GST either.

- Sometimes the online product is inferior in some way (e.g. manual in Malay instead of English)

- Sometimes retail is cheaper than online.


All in all, I dont think JBH has too much to worry about for the next few years.


----------



## ROE

There are always people who prefer brick and mortal and I'm not predicting the doom day scenario for JB or other retailers

I just see Internet as a credible threat to their model and take away sales 
because you not talking about a few bucks differences you talking about hundred of dollars or a massive margin.

and for that margin people are willing to try and once they tried and like the stuff they likely to go back
and abandon brick and mortal for certain goods ....because the saving is massive

I bought 1 game from thehut.com to test ..ever since then I never ever bought anything from brick and mortal.

I buy all my Xbox360 games and blueray from thehut.com  30%-50% off price here...and some old game it just bargain give away $20 including shipping...

This is my shopping habbit these days

For hard copy books 
http://www.bookdepository.co.uk/ (cheapest price on most items)

For electronic books I got kindle (Amazon.com) or million of out of copyright title free from books.google.com and hundred of other places

For Games
www.thehut.com and Steam and my iPhone and iPad all via itunes

For Music
itunes or youtube.com

For Camera
http://www.dwidigitalcameras.com.au/store/index.asp

For funiture I look for new overstock sell on ebay.com.au for 40% less


All Accessories I buy online
headphones, batteries, phone covers
http://www.dealextreme.com/ (this place is SOOOO cheap i dont know how they make money)
I bought hundred of item from them... free shipping even on $1 item...

Cables and Hi fi Accessories
http://www.supercheapcables.com.au/
but deal extreme is now my prefer destination for most things


For TV once every 10 years I buy a new TV...
Brick and mortal.

I drop in brick shop for food supplies and the rest of the time I go kayak and bike riding 

Internet is a Disruptive technology and it will disrupt the shopping mall mogul like
Westfields as tenant want less rent to cater for lower foot print.

and it will disrupt the traditional retailers..


----------



## tinhat

I'm also not in the JBH fan club. I can't see that it has a long term sustainable competitive advantage. Sales growth is mainly coming from opening new stores. Margins are going to continue to fall. Online sales and parallel imports are going to grow as a threat. Online delivery of software, especially to mobile devices is going to also challenge bricks and mortar technology retailers.

Call me crazy, but my contrarian play in the consumer discretionary retail sector right now is in DJS. DJS stable of fashion brands have decent retail margins. Remember the days when retail was cost plus 100%? It will be interesting to see their report in March - I think they will do better than Myer although right now they are being tarred with the same brush as Myer. I think the market has been far too bearish on DJS and has over-discounted its share price.


----------



## VSntchr

tinhat said:


> Margins are going to continue to fall. .




Whilst I agree, margins could fall in the future....margins have thus far only been improving.

JB has generated so much cash that they are going to have to do something with it (capital review being released in march i believe). Who knows, Terry Smart might come out and say that they are launching a full blown attack on the online trade and plan to conquer that market also??? This is unlikely I know, and I really hope they dont do something silly with the money like so many aussie companies seem to do...

Everyone has to keep in mind that the comparable store sales were only slightly negative if not flat (I think it was NZ stores that dragged the figure negative).
JB is cycling over a period where a whole heap of people spent their stimulus payments on tv's etc etc..so to even break even with these sort of sales is a good achievement.

Another thing that makes these results positive (in my view) is that sales were comparable even with the disasterous effect that price deflation in the flat screen tv market is having.
JB is obviously selling alot more items, but due to the price of alot of these things falling (the strong AUD adding to this)...sales are struggling to increase.

No matter how good the business model is, and how well it has dealt with problems thus far..these risks seem like they will persist for the forseeable future.

My thinking is that through the opening of new stores JB will be able to continue to increase profits and sales for at least another 2 years. After this I can see two outcomes: the first is that price deflation settles down and consumers start spending like they used to. The second being that price deflation continues to plague the electronic retail sector and more consumers switch to the internet. 

Clearly, whichever of these prevails will determine the future value of the almighty JB hi fi.


----------



## tothemax6

Yeah I changed my mind on JBH. I bought in in a dip, and sold it the other day after reading a bad bit of retail news, just missing the drop the next day.
JBH does look good in theory. They strip their store down to the basics to save money ('run it on the smell of an oily rag' as Roger Montgomery put it), they have good spacing and positioning in their store (allowing good customer flow and density), and they have all their gadgets running so everyone can look at it and try it out. Then they have the big and simple yellow/black banners etc, which helps draw people in. It is pretty much the best retailing setup for electronics there is in the market at the moment.

Except for one - ebay. When I buy something from ebay, I can research it from the comfort of my computer, I can watch youtube videos comparing and demonstrating the products, compare prices at high speed, and then order it in about 1 minute. It then appears on my doorstep in a week or less, no driving, no parking, no physical effort whatsoever. More often than not I get it for a better price too, sometimes by a large margin.
A retail store has only one advantage over ebay - immediate returns with less effort.


----------



## McCoy Pauley

Roger Montgomery has written about JBH for his latest Eureka Report column (usually uploaded to his blog about 24 hours after publication in the Eureka Report).  He sees the capital review program as a potential negative and he believes that JBH is almost at full maturation - the new stores to be rolled out won't add that much to the return on equity.  He sees the intrinsic value of JBH only lifting 11% in the next two years.


----------



## robusta

This Kogan bloke seems to have a knack for marketing.

http://www.marketingmag.com.au/arti...-a-million-dollars-on-the-line-for-publicity/


----------



## VSntchr

robusta said:


> This Kogan bloke seems to have a knack for marketing.
> 
> http://www.marketingmag.com.au/arti...-a-million-dollars-on-the-line-for-publicity/




Read the article and all I could think was what a f**ing idiot this guy is!
Apple has so much power that it offers places like JB virtually no margins at all - JB only takes on there products to try and gain revenue and traffic to boost sales for other items...
With android already gaining massively on apple this is the last thing I can see happening.

Secondly, its blatantly obvious that Kogan does not expect Smart to except the bet...I mean how is that not going to be an ethical conflict of interest for the managing director of the company to have a personal financial interest tied to the outcome.

Finally, Kogan's products are crappy quality..he goes on about offering the Australian public cheaper goods...yeah thanks for the cheaper goods...that you are buying for virtually nothing in the first place due to the crappy quality!

/end rant!


----------



## mr. jeff

Yeah Value Snatcher I agree that there is more to JB than Apple stuff which sells itself, and provides very small margins. It's the extras that give them the cut when selling the apple gear anyway.

But JB will have to stop just blindly rolling out stores as their growth method and start innovating more for their sales. A lot of my friends who have grown up with JB and it's excellent prices all of a sudden found that their prices were no longer guaranteed the best in the area, which was their strength prior. I think that they may end up going the way of the other retailers and establishing a strong market share then get lazy. So far so good. 

They should cut out all the glossy rubbish and stop trying to dress up everything - it may look better but JB was never about looking good, it was about having the latest gear with the young kids selling it who liked it, knew it and sold it at the very best prices. This sales model suits apple well and if they lose apple then they can still sell all the good accessories. The gloss just goes straight into the prices and cuts into the margins. Plus like for likes are not that pretty, which speaks quite plainly for their changes.


----------



## VSntchr

Lots of news this morning.
NPAT guidance confirmed but one off reduction due to a major restructure of Clive Anthonys.

Buy back of up to 10% (170m worth) announced, similar to BHP and WOW where it will be taken up by many due to the favourable tax outcomes - largely a franked dividend component and only a small capital component.
What I cant understand is why they are choosing to fund the buy back with debt, when the whole purpose of the capital review was because they have so much cash? why not use the cash??? Am I missing something here?

Does this mean that the equity figure should be reduced by $170m? Im still trying to figure this out - if it does, then even factoring in the one off reduction in NPAT produces a nice jump in ROE but also a big drop in equity/share


----------



## McCoy Pauley

An almost 6% jump in the first 5 minutes of trading.  Looks like the market loves the news.


----------



## skc

McCoy Pauley said:


> An almost 6% jump in the first 5 minutes of trading.  Looks like the market loves the news.




Certain class of investors (e.g. SMSF) are well ahead when it comes to off-market buybacks with generous tax incentives. Then you have traders who surf on that wave.
I expect a large fall on Friday (if not tomorrow) to bring it back down (if not below) where it all started.

And let's not forget the other announcement relates to an one-off downgrade in profit...

Speaking of Clive Anthony - I've shopped there a few times and they actually had decent customer service (compare with say Harvey Norman) plus they have good prices - but I suppose that's their downfall.


----------



## ozbrit

*JB Hi fi*

We're an early retired couple in our mid-fifties living off our modest savings and investments until our superannuations become tax free at sixty. for the past two tax years we haven't earned sufficient to pay any income tax and it's highly unlikely that we will for 2010/11 either.

In our portfolio we have 500 JBH shares. After yesterdays announcement of a company buy back of around 10% of shares, we wonder whether it'd be beneficial to partake in the buy back. Our policy is to invest in any share for only a short to medium term.

We don't have a financial adviser and deal through Commsec online so don't have a broker as such.

We purchased the JBH just before Christmas for $19.29 and they went backwards, we've picked up a 100% fully franked divi of 48c which we'll be refunded a further 30% tax by courtesy of the ATO. The share price today is around $20.

The JBH offer is outlined here: http://imagesignal.comsec.com.au/asxdata/20110329/pdf/01165843.pdf

So 8-14% discount to the market price of JBH for five days prior to the close of the offer. Tax wise that the buy back comprises a tax component of 58c a share and a fully franked dividend of 58c. Does that mean $1.16 all up? So supposing the average price per share is $20 less 14% = $17.20 + ($1.16 + 30% tax = $1.51) for a total nett worth to us of $18.71 p/share or a big loss to us - it seems.

I'm probably missing something here, but it looks a lousy offer to us, where are we going wrong?


----------



## skc

*Re: JB Hi fi*



ozbrit said:


> So 8-14% discount to the market price of JBH for five days prior to the close of the offer. Tax wise that the buy back comprises a tax component of 58c a share and a fully franked dividend of 58c. Does that mean $1.16 all up? So supposing the average price per share is $20 less 14% = $17.20 + ($1.16 + 30% tax = $1.51) for a total nett worth to us of $18.71 p/share or a big loss to us - it seems.
> 
> I'm probably missing something here, but it looks a lousy offer to us, where are we going wrong?




That is not correct. Read it again 



> For Australian tax purposes, the Buy-Back price is expected to comprise the following:
> a) a capital component of $0.58 per share; and
> b) a fully franked dividend *equal to the Buy-Back price less $0.58.*
> For capital gains tax purposes, the sale consideration received by JB Hi-Fi's shareholders will be the Deemed
> Market Value2 less the dividend component.


----------



## ozbrit

*Re: JB Hi fi*



skc said:


> That is not correct. Read it again





Haha, you're correct, so would that make the offer worse by 58c?  

I suppose I should also have stated in my original post, that I'm not actually seeking personal financial advice per se, but whether the offer in cases like ours make it worth pursuing.


----------



## VSntchr

*Re: JB Hi fi*

Im in the middle of making this decision for myself also.
Below is my interpretation, someone please correct me if I am wrong - which I very well could be as I haven't had much experience with taxation/buybacks/franking.

The factors that come into consideration are: you will be selling your shares back at a price of $0.58. This means that your making a huge capital loss...this is beneficial as it eliminates any capital gains tax on your JB Hi-Fi holdings...and what is left will be able to carry over and cancel out  other capital gains tax which you may have to pay.

The other important thing is that the majority of the payout will come in the form of a franked dividend...the franking means that you can get even more money back from the ATO when you lodge your tax return.

So basically you have to weigh up whether the two above points will outweigh giving up your shares for perhaps a 14% discount...


----------



## skc

*Re: JB Hi fi*



ozbrit said:


> Haha, you're correct, so would that make the offer worse by 58c?
> 
> I suppose I should also have stated in my original post, that I'm not actually seeking personal financial advice per se, but whether the offer in cases like ours make it worth pursuing.




Say the market price is $20, and buy back price is 14% lower = $17.2. 

If you participate in the buy back you get:

a). $0.58 in capital.
b). $16.62 in fully franked dividend (being the buyback price - $0.58)
c). a capital loss (being your purchase price minus the capital component and some tax component of the buyback based on ATO ruling) 
d). a franking credit of $7.12 from the fully franked dividend

Total value of the buyback to you is the sum of a) to d) but depending on your personal tax circumstances that value will change. 

Don't forget selling on market and continue holding are 2 alternatives available as well. But if you want to sell on market you need to take commission and tax into account as well if you want proper comparison.

Usually in the buyback booklet there are detailed explaination and example calculations that you can follow. But if you can't understand them then getting some financial advice may not be a bad thing (rather than listen to some random guy on a forum!).


----------



## skc

*Re: JB Hi fi*

If you want more understanding have a look at the buyback booklet 7 March from BHP (who's doing the same thing right now).

P.24-25 contain worked examples.


----------



## Spongle

*Re: JB Hi fi*

As a novice I know very little about the ins and out of share buyback schemes and what not.

Nevertheless JB hifi looks to be an interesting stock right now at least in the short term... I was just about to buy some shares in it myself.

I'm going to post up a chart; trendlines and all that jazz for this stock and post it in another thread and see what info can get. Then I'll crunch the numbers you posted and compare them to the numbers of the chart that hopefully somebody will help me with.

NB i must point out please don't take what I'm saying/going to say as financial advice of any sort. I'm merley trying to get some figures and crunch them. Then you can do with that *GENERAL INFOMATION* as you wish.

_oops... I had a competely different stock in my mind. Yes I am a gozzer. I'm still going to do all the stuff I mentioed prior so just bear with am and i shouldn't be long. Also as I am a total novice I wll be relying in the feedback of someone who actually knows what they are talking about and If I don't recieve any than my help probably won;t be very helpfull. I give it a go though... beats studying calculus which is what II'm meant to be doing right now haha_

Will post here again soon ASAP


----------



## ozbrit

*Re: JB Hi fi*

Thankyou VSntchr and particularly skc. I was correct in one way by well n truly barking up the wrong tree.

My first posts on this forum today, I think i'm going to like it here and hopefully will get to contribute something of value to others.

Cheers - Phil

stop press: Spongle that'll be great.


----------



## skc

*Re: JB Hi fi*



ozbrit said:


> Thankyou VSntchr and particularly skc. I was correct in one way by well n truly barking up the wrong tree.
> 
> My first posts on this forum today, I think i'm going to like it here and hopefully will get to contribute something of value to others.
> 
> Cheers - Phil
> 
> stop press: Spongle that'll be great.




Not at all and welcome to the forum.

It just so happened that I was working all this out for my brother-in-law's BHP shares on the weekend...


----------



## Spongle

*JB hi fi*

I had a massive spiel that went with this thread but then i lost it.

In a nutshell: couple own jb hi fi shares. Have been offered a buyback scheme. Stocks shot up in price. I made a few very simple charts. Opinions?







Most appreciated


----------



## ozbrit

*Re: JB Hi fi*



skc said:


> Say the market price is $20, and buy back price is 14% lower = $17.2.
> 
> If you participate in the buy back you get:
> 
> a). $0.58 in capital.
> b). $16.62 in fully franked dividend (being the buyback price - $0.58)
> c). a capital loss (being your purchase price minus the capital component and some tax component of the buyback based on ATO ruling)
> d). a franking credit of $7.12 from the fully franked dividend





The franking credit of $7.12, is this correct? Isn't the company corporate tax rate a flat 30%. 

When we've previously declared fully franked divis to the ATO we've only been refunded 30%, that's with us being under the threshold for tax.

Cheers again - Phil


----------



## skc

*Re: JB Hi fi*



ozbrit said:


> The franking credit of $7.12, is this correct? Isn't the company corporate tax rate a flat 30%.
> 
> When we've previously declared fully franked divis to the ATO we've only been refunded 30%, that's with us being under the threshold for tax.
> 
> Cheers again - Phil




Assume $16.62 fully franked dividend
Gross up dividend = $16.62 / 0.7 = $23.74
Franking credit = $23.74 * 0.3 = $7.12


----------



## ozbrit

*Re: JB Hi fi*



skc said:


> Assume $16.62 fully franked dividend
> Gross up dividend = $16.62 / 0.7 = $23.74
> Franking credit = $23.74 * 0.3 = $7.12




Yes I was working on $16.62 being the gross figure   But the new gross  makes this even more attractive to us. Today's SP up another 30-40c atm. Very happy here.
Just one little question, Is it your dog at the PC computing the figures for you, when are the pups available? )


----------



## skc

*Re: JB Hi fi*



ozbrit said:


> Yes I was working on $16.62 being the gross figure   But the new gross  makes this even more attractive to us. Today's SP up another 30-40c atm. Very happy here.
> Just one little question, Is it your dog at the PC computing the figures for you, when are the pups available? )




Lol. I learned all my trading my this dog. She's in doggie heaven now...

No offsprings (de-sex operation can do that).

Don't take my words for everything and read your documents carefully as every buy back is slightly different. Also keep in mind that the current market price of JBH will certainly be different (up or down) by the time the buyback proceeds.


----------



## ozbrit

Sorry to hear about the demise of your dog.

Yeah I'll be going through the offer document with a fine tooth comb. We do have trading strategies in place.  We have 10 grand in each of three stocks which we punted on in time for the so-called santa claus rally, early dec. JBH, Carsales.com and Westpac. We've had decent divis on all three but the SP values have been underwhelming.  We don't need the cash for a couple of years, so we can wait but would prefer to grab a quick 10% on JBH & CRZ and 20% for WBC. Looks like we've well n truly nailed our JBH target, though in not quite the manner we expected. Unless JBH goes back to $18ish I don't expect to re-visit them but instead look for another prospect. We have started to re-look at Telstra with it's near 10% divis. One down, two to go.


----------



## skc

skc said:


> I expect a large fall on Friday (if not tomorrow) to bring it back down (if not below) where it all started.




Down 6% at today's low from yesterday's high. The simplest of short trades...



ozbrit said:


> Sorry to hear about the demise of your dog.




She died at age 17 so definitely had a good run.


----------



## Tightwad

I got an email from the intelligentnvestor site with an article on the buy back, you may need to sign up for a trial to read it.  

At this stage it seems a good deal for me, i bought at 20.50, watched it bounce for a couple of days then it dropped.


----------



## ozbrit

These shares have only bounced ~10% since the 10% buyback announcement, so no increase from the recent market uptrend. The lower the market price remains then the greater the interest from shareholders wanting to give their shares back is likely to be. 

I see from the JBH prospectus they are only able to guarantee a buyback of the first 250 shares from a holding, unless that holding is 300 or less, in which case they'll take the lot to save you being left with a tiny amount.

My wife and me have 500 shares in a joint chess account, as we're two individual taxpayers we should have them all bought back, but they won't be handled like that. I think we'll be very fortunate if all 500 are accepted, particularly if the SP continues to languish below the $20 mark. Just my guess of course.


----------



## skc

JBH has gone down 10% in the last 2 sessions. Most other retail stocks aren't doing so bad.

There is a fair bit of scale back on the off-market buyback. Could that be the cause (i.e. people selling their holdings that they bought for the buyback)?

A good set up for a pairs trade with another retailer, but I can't tell when is the selling likely to end...


----------



## LifeChoices

skc said:


> A good set up for a pairs trade with another retailer, but I can't tell when is the selling likely to end...




Looks like a good candidate for my half baked system, which is currently showing -67% (indicating strong selling)

I'll stick an alert on it and post it here when I see it turning around.


----------



## zac

Today JBH has a new yearly low.
Any reason why the stocks have gone backwards?
Ive just bought into them as Ive estimated their Intrinsic Value to be around $20 and the projected IV for 2013 is around double the current SP.


----------



## VSntchr

zac said:


> Today JBH has a new yearly low.
> Any reason why the stocks have gone backwards?
> Ive just bought into them as Ive estimated their Intrinsic Value to be around $20 and the projected IV for 2013 is around double the current SP.




While estimating value for a company is important, you must understand that those estimates are based on earnings that do not incorporate alot of risks that are present to JB currently, namely the fact that 30% of revenue is in the form of cd's etc...stuff which will soon be able to be downloaded online.

It is my understanding that JB is in talks with companies to create a product that will align them with the downloadable age..however..the risk that JB could lose this large chunk of revenue is just one major reason why they have been getting smashed lately...
Retail in general is suffering due to global economic worries...if the economy doesn't start picking up...noone will have money to be buying discretionary products...


I think you may need to place less emphasis on intrinsic values...
If you truly beleive in the future of JB...then now may be a good time to buy more...management has proved to be exceptional thus far (10 year track record is outstanding)....the question you have to ask is - will this continue!


----------



## titus

VSntchr said:


> I think you may need to place less emphasis on intrinsic values...




Yep, I think retail in the technology space is in the doldrums at the moment.  You only have to visit your local JBH to see that hardly anyone is buying TVs at the moment compared to say 2-5 years ago.  Everyone has their flatscreens.  They have reached saturation so they have CDs, DVDs and other technology products to sell.  And what is happening to these forms of distributions?

I'm quite impressed with the management of JBH but they find themselves in a difficult environment at the moment.


----------



## zac

VSntchr said:


> While estimating value for a company is important, you must understand that those estimates are based on earnings that do not incorporate alot of risks that are present to JB currently, namely the fact that 30% of revenue is in the form of cd's etc...stuff which will soon be able to be downloaded online.
> 
> It is my understanding that JB is in talks with companies to create a product that will align them with the downloadable age..however..the risk that JB could lose this large chunk of revenue is just one major reason why they have been getting smashed lately...
> Retail in general is suffering due to global economic worries...if the economy doesn't start picking up...noone will have money to be buying discretionary products...
> 
> 
> I think you may need to place less emphasis on intrinsic values...
> If you truly beleive in the future of JB...then now may be a good time to buy more...management has proved to be exceptional thus far (10 year track record is outstanding)....the question you have to ask is - will this continue!




Yes thats a very valid point,
I dont have a problem with the current value ive given it, but the forecast values im not convinced. The earnings in my opinion wont be as much as predicted.
Good point you raise though, physical media is slowly fading from existence.


----------



## skc

> Sorry to be blunt and i hope no one is offended, but seriously other then a low yeild, the merits of JBH as a good investment do not warrant at present any questioning.....






> Im not sure about you but thats an OUTSTANDING result and beyond questioning by anyone.....
> 
> Honestly anyone bagging JBH for its coorporate performance has no idea what a good investment is....debate is fantastic, but please do some research if you claim to know stuff, otherwise ask and you shall recieve...






> Its value as an investment was called into question very clearly......and its the one stock all the commentators and analysits agree is the darling of the market.....especially looking forwards.......
> 
> All I say to the punters is DYOR and make your own decisions, but JBH IMO and in every analyst i have heard comment , every fundamental valuers opinion a great stock....
> 
> The figures above show it, the declining CODB, show it, the NPAT and EBIT confirm it......the continual profitable store roll out says it...
> 
> What more does anyone need say???????




Looking back a few pages... when JB was $22. A great company at the wrong price... May be it's always good to keep an open mind and question / check assumptions.

The chart suggests a possible retest of the old support / new resistance at $17-$17.5...


----------



## zac

http://www.heraldsun.com.au/busines...to-weather-storm/story-fn7j19iv-1226065941839

Some promising news for JBH.
Of all my portfolio, JBH is one of my better performers.
There have been concerns that JBH will fade away with internet businesses and online medium taking over physical music/videos etc.

With an expectation of 40% growth over the next 4 years that can only be a good thing. Even if they dont reach that target, atleast theyre not shrinking.
I like their business model.


----------



## zac

I've just been reading an article on the JBH Share buy back.
http://www.reuters.com/finance/stocks/JBH.AX/key-developments/article/2322687

I dont get why anyone would allow JBH to buy back their shares for $16 when at the time they were trading around $18.
Whats the benefit in selling them back?


----------



## VSntchr

zac said:


> I've just been reading an article on the JBH Share buy back.
> http://www.reuters.com/finance/stocks/JBH.AX/key-developments/article/2322687
> 
> I dont get why anyone would allow JBH to buy back their shares for $16 when at the time they were trading around $18.
> Whats the benefit in selling them back?




I allowed them to buy mine. Basically its all in the structure of the buyback. Technically they bought my shares for $0.58. The rest was a franked dividend. Now because im only 21 (and still at uni) my tax bracket is the lowest one. This means that franking credits are very valuable to me...likewise to the superfunds(thus why it was oversubscribed)..

So the benefit in the end worked out that I was roughly $600 better off by selling thru the buy back, than selling on market...and that was only on a holding of ~$4k. And the other benefit is I now have massive capital losses to use to offset my gains on FGE


----------



## So_Cynical

condog said:


> (19th-January-2010) *I subscribe to a valuation service that charges me a lot of money to value these comnpanies *...it has JBH presently valued at $23.50 and thats based on July 09 trading figures.....i expect a re valuation very soon , with 6 months good trading under there belt and little dividend to rob the growth on this one...
> 
> No matter what criterea other then Yield i filter for good results, JBH comes out in the top few performing big busineses that i can find....
> 
> Also Roger Montgomery who i very much respect, but who is also a very conservative expert valuer on these types of busines absolutely loves JBH and has it valued at $23 this year, $28 next year and $33+ the following year....
> 
> Sorry to be blunt and i hope no one is offended, but seriously other then a low yeild, the merits of JBH as a good investment do not warrant at present any questioning.....






So_Cynical said:


> (19th-January-2010) Chart looks very toppy to me, JBH certainly has had a great run and was value, but its hard to see it continuing to go up at the rate it has over the last 12 months....falling volume and the crappy dividend yield point to sideways movement over the next 12 months IMO.
> 
> Besides as others have commented on...JB HI-FI seem to be everywhere now and can be considered as just another electronics retailer that has a better than average range of music and videos...i know some people love charts that look like this, i hate em cos all i see is where i should of brought, anyone buying now has clearly missed the boat.
> ~




I called the top 16 months ago and was mostly correct with my sideways SP projection.  however i did call a SP collapse about 6 months ago that didn't happen....i don't subscribe to a valuation service that charges me a lot of money.


----------



## So_Cynical

So_Cynical said:


> (10th-December-2010) JBH headed for $15 without a doubt...margins wafer thin, discretionary spending under pressure, internet (GST free) competition, 20 or so more days of Xmas spending then the reality of consumers that already have all the latest crap and more IR pressures ahead.




6 months later and we are almost there...today's low of $16.02 came very close to my $15 prediction of 6 months ago..well an SP with a 15 at the front of it anyway, im surprised its taken this long to come about.


----------



## zac

So_Cynical said:


> 6 months later and we are almost there...today's low of $16.02 came very close to my $15 prediction of 6 months ago..well an SP with a 15 at the front of it anyway, im surprised its taken this long to come about.




Thats interesting as recently I was reading an article on JBH as to theyre expecting 40% growth in the next 4 years and have worked a business model to overcome the online issues.
Analyst forecasts hasnt changed either to make the business any less valuable.


----------



## ROE

zac said:


> Thats interesting as recently I was reading an article on JBH as to theyre expecting 40% growth in the next 4 years and have worked a business model to overcome the online issues.
> Analyst forecasts hasnt changed either to make the business any less valuable.




is it the same analyst that said Macquarie bank at $85 is cheap for a growing company  but then they slapped on a sell when GFC hits 

I'm a pretty keen shopper and I can tell you JBH lost its cheap model.
JBH up to this time it has been a good business, going forward I'm a little unsure

online, more competition, cheaper deal else where, all the good stores already roll out, only second rate store left

Good guys do much better deal these days and once the word is out they are not cheap...well I already know they aren't cheap any more so my first stop is the good guys...

this week went and bought wii Controller - JBH = $67 bucks, good guys $55 bucks
also bought logitech universal remote JBH = $200 plus -- Dick Smith $169 
so bought wii controller off good guys, universal remote off dickies

it wont be the end of JBH but the market price JBH at a premium to other business and I cant see they deserve that premium... when it starts hitting low teen I be more interested ...


----------



## RandR

Was in a JBH store on saturday morning, and business seemed busy as ever. However when I was there around the start of May it did seem a little quiter then usual.

Should be a very interesting report out in the next month. I hold stock in JBH, Will be very keen to see if their numbers are still going up as expected. There is still a bit more growth left in the business, but like others have mentioned on this thread, the majority of it is done.

The big question mark going forward is what will management do with all the cash the company is spinning once they have decided growth in the Australian market has reached its end ...

Will they continue with share buy backs ? substantially increase dividend payouts, or look to acquire new business ? Its these questions that i think are most important going forward.


----------



## zac

Yes im interested to see the direction of the company.
As I mentioned in a previous post, it was commented JBH is plannig 40% growth over the next few years. Im not sure how so.

Roger Montgomery revised his Intrinsic Value estimate of the company to under $14 however on a televised interview he praised them saying although they are losing some business to the online world, its a minimal impact and they still are a premium company.
So im in 2 minds whether to hold or sell.


----------



## The Trooper

I think the share buyback is JBH managements way of compensating for lost sales. It means they create greater value for shareholders from the pool of funding available. I also like to remind myself when considering anything to do with people that something like 90% of the population play below the line. That is, they are content working for a living, they are slow to adapt to change, they spend money on wants and they make decisions based on the sentiment of heresay and trends without considering the facts. Things like downloading are still not embraced by the majority of the population and pay download sites are expensive and not very user friendly. There is also the new range of smart tv's coming out and i'm looking myself to move my 42" plasma to the spare room to get a smart TV. I think the underlying business of JBH that supports the adaptation of technology to the consumer market hasn't changed. While period growth or revenue may be affected by  sentiment or changes in technology i'm pretty sure people will keep buying technology. I'll keep buying JBH shares.


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## notting

Thing about jb is that compared to Dick Smith and Harvey Norman it has the the high turnover small goods teen factor at the front door - music CDs. This has always given the stores a buzz. The CD market is now dead. JBs Model is no better than the others now apart from it's better prices which is going to be harder with internet sales etc
No wonder it is one of the most shorted stocks on the Asx at present at around $15


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## The Trooper

notting said:


> Thing about jb is that compared to Dick Smith and Harvey Norman it has the the high turnover small goods teen factor at the front door - music CDs. This has always given the stores a buzz. The CD market is now dead. JBs Model is no better than the others now apart from it's better prices which is going to be harder with internet sales etc
> No wonder it is one of the most shorted stocks on the Asx at present at around $15




You may be right but, being a public company, the issue you are raising is one of materiality. If the impact of the CD market was likely to materially affect the business operations of JBH the management would be obliged to report it. The fact they have not and have not adjusted their earnings forecast for FY11 since March suggests this is not material at this stage.

I am convinced the chicken little effect is running ripe with this stock at present and am still buying shares at close to $15 and waiting to see their annual report in a few months time.


----------



## RandR

The Trooper said:


> You may be right but, being a public company, the issue you are raising is one of materiality. If the impact of the CD market was likely to materially affect the business operations of JBH the management would be obliged to report it. The fact they have not and have not adjusted their earnings forecast for FY11 since March suggests this is not material at this stage.
> 
> I am convinced the chicken little effect is running ripe with this stock at present and am still buying shares at close to $15 and waiting to see their annual report in a few months time.




Id disagree that the cd market is 'dead'. I think it still has a way to go yet.  

I would strongly consider picking up some more JBH stock at $15. But all of my 'stock money' is invested at present.

Eagerly awaiting the quaterly report that is due in about 2 weeks. Should shed some strong light on the results of the last year.


----------



## notting

Well then lets not take uneceassry risks.Go to JB at 11am on a Saturday morning, not tomorrow cause its school holidays so wiinot be a true reflectio, hang out in the CD section which used to be very buzzy at that time and assess for ourselves. The I tunes down loads are siprisingly high and there ain't too many record/CD shops left around town. I can also get any song I whant off UTube ,with video for nothing, once I pay my braodband bill.  That's what I'm basing my half baked opinion on. 
By the wayI am typing this on my Asuse Eeepad, which I decided to buy after looking at the I pad 2, the Motoroler Zoom at JB who provide good customer servic.  Unfortunately my cold heartd ed business mind reviewed all three options on Cnet. I then baught the Asus off Amazon from US for half the price.
God it's slow and hard typing on this peace of crap. Good for checking stuff out whilst watching TV though.


----------



## RandR

notting said:


> Well then lets not take uneceassry risks.Go to JB at 11am on a Saturday morning, not tomorrow cause its school holidays so wiinot be a true reflectio, hang out in the CD section which used to be very buzzy at that time and assess for ourselves. The I tunes down loads are siprisingly high and there ain't too many record/CD shops left around town. I can also get any song I whant off UTube ,with video for nothing, once I pay my braodband bill.  That's what I'm basing my half baked opinion on.
> By the wayI am typing this on my Asuse Eeepad, which I decided to buy after looking at the I pad 2, the Motoroler Zoom at JB who provide good customer servic.  Unfortunately my cold heartd ed business mind reviewed all three options on Cnet. I then baught the Asus off Amazon from US for half the price.
> God it's slow and hard typing on this peace of crap. Good for checking stuff out whilst watching TV though.




haha, yes, its plain to see for everyone that cd retail is and has been under serious pressure for quite some time, and it will continure to be so. Is it going to die out ? Yes, of course it will it is a technological platform that is now dated, and all dated technology at some point becomes worthless.

But i still think it has a future for at least a couple of years yet. There are other tech changes on the way that could potentially stop physical music retailing (google cloud computing etc) Im sure if the music cd division starts to perform less well then other sections of JB retail then they will adjust to suit.

But i was in a JB Hi Fi today around midday, and as always on a saturday, people were queing up at the checkout.


----------



## zac

RandR said:


> haha, yes, its plain to see for everyone that cd retail is and has been under serious pressure for quite some time, and it will continure to be so. Is it going to die out ? Yes, of course it will it is a technological platform that is now dated, and all dated technology at some point becomes worthless.
> 
> But i still think it has a future for at least a couple of years yet. There are other tech changes on the way that could potentially stop physical music retailing (google cloud computing etc) Im sure if the music cd division starts to perform less well then other sections of JB retail then they will adjust to suit.
> 
> But i was in a JB Hi Fi today around midday, and as always on a saturday, people were queing up at the checkout.




CD's, Movies, Audio, Digital Media etc will slowly fade from the bricks and mortar stores. However many people, ie economists have said that its only a small portion of JBH. Im not sure how Management expect their 40% growth in the next 4 years. They should make an announcement of sorts to shareholders to set them at ease. Perhaps there will be some comment on it, in their next annual report.
The other matter is, people still need to get their hardware from somewhere and JBH has the buying power and proven itself there.
Maybe their business model will have to change and despite their drastically reduced SP, I still hold faith in them.


----------



## Tightwad

I can't see CD's disappearing for a while, it's well entrenched as the non-download choice.  Gen Y may prefer digital media, but there are a lot of cd buyers out there.  Personally I prefer to own a physical cd - I'm not a fan of mp3 and other proprietry formats, DRM, itunes etc.

JB has a decent range of CDs and some good specials.  This really buys them the street cred of an alternate music store and makes Harvey Norman and Dick Smith look like a place where your mum shops.


----------



## So_Cynical

The total death of the CD is inevitable, as inevitable as the death of Vinyl and the Cassette was...just a matter of time...cloud storage will come to dominate over the next 5 years.

http://arstechnica.com/tech-policy/...-herrings-for-a-music-industry-in-trouble.ars
~


----------



## Tightwad

Vinyl isnt dead, its a niche market


----------



## ginar

Tightwad said:


> I can't see CD's disappearing for a while, it's well entrenched as the non-download choice.  Gen Y may prefer digital media, but there are a lot of cd buyers out there.  Personally I prefer to own a physical cd - I'm not a fan of mp3 and other proprietry formats, DRM, itunes etc.
> 
> JB has a decent range of CDs and some good specials.  This really buys them the street cred of an alternate music store and makes Harvey Norman and Dick Smith look like a place where your mum shops.




windows media played will turn compressed music into cd digital that you can put into car  ....   ipods , mp3 players and flash drives are the future , im almost ready to throw the dvd player out , tv's these days with usb movie are the future . CD's well on the way to obsolete and DVD not far behaind


----------



## Tukker

ginar said:


> windows media played will turn compressed music into cd digital that you can put into car  ....   ipods , mp3 players and flash drives are the future , im almost ready to throw the dvd player out , tv's these days with usb movie are the future . CD's well on the way to obsolete and DVD not far behaind




The Future is online TV, distributed by mobile broadband networks directly to your tv, mobile, computer.

Subscriptions for on-demand streaming.

I-TV for example.


----------



## RandR

Tukker said:


> The Future is online TV, distributed by mobile broadband networks directly to your tv, mobile, computer.
> 
> Subscriptions for on-demand streaming.
> 
> I-TV for example.




Possibly ... I think at this stage its a contender, but who truly knows what the future holds eh ?

Telstra to become a pseudo media company ? Its quite possible .....

As others have stated in this thread, physical retail of cd/dvd/blu-ray will continue into time, but it will be continually and gradually diminished, until possibly becoming a niche market. 

A retailer like JBH definitly has an interesting future imo.

If the share price continues to show weakness, at what point do people think JBH could become a takeover target ?


----------



## So_Cynical

RandR said:


> Possibly ... I think at this stage its a contender, but who truly knows what the future holds eh ?




Dude the demise of CD/DVD/blue ray/etc is an absolute certainty....unequivocally inevitable.
~





RandR said:


> If the share price continues to show weakness, at what point do people think JBH could become a takeover target ?




Why would anyone want to take over a company selling products with declining sales?


----------



## RandR

So_Cynical said:


> Dude the demise of CD/DVD/blue ray/etc is an absolute certainty....unequivocally inevitable.




Dude ... read my post again ... im not questioning the inevitability of the decline of cd/dvd/blue ray formats ... i was questioning whether the replacement will indeed be 'smart tv's'  or perhaps some other technological medium .. (cloud computing etc)

View attachment 43693






So_Cynical said:


> would anyone want to take over a company selling products with declining sales?




Possibly because that company is making more money from its other products  ?


----------



## zac

Does anyone actually have figures on how much the DVD's/CD's represent in total sales?
Its like some people here think JBH is like a Sanity store.


----------



## notting

*JBH Loses it's Mojo*

The thing that some are missing is the buzz factor that the CDs create.  Even if it was just 1% of JBs sales it got many people buzzing around the shop snooping at other things and maybe returning when they are a little bit older to buy a sound system or a camcorder.
I went into JB and it sill has a buzz, but it wasn't teens. It seemed to be 28 to 35 year olds looking at gadgets, excitedly, then running out of the store!  The sales staff were twiddling their thumbs.
I asked a JB guy who was in the CD section if they still sell any CDs he said they did.  I said why?  He said people like the physical thing. There were not hordes of teens just a couple of 35 to 50 year olds checking out some CDs.
It's the teen excitement factor that JB had that's just gone.  It used to be like all the rages who were recovering from the night before where continuing the night club scene in JB the next Saturday morning.  That's just not happening.
It's a good move that they are stocking apple stuff because the buzz is around Iphones and Ipads but it's quite low key in the JB store compared to an apple shop.
If JB is going to make it further they need to be the ones that have people lining the streets to buy the Ipad 3 on its first day of release, because the stupid news has done another massive free promotion for apple by covering it!. Can JB capture this?
Harvey Normal on the other hand was like Dimmeys before it closed!!!  Dead.  The sales staff didn't even seem interested!
One thing I don't understand is why local shops can't compete with  overseas internet sales, given they source their stuff from overseas just as we can?  GST is only 10% and other countries charge for that too, we usually can't avoid it


----------



## skc

*Re: JBH Loses it's Mojo*



notting said:


> It's the teen excitement factor that JB had that's just gone.  It used to be like all the rages who were recovering from the night before where continuing the night club scene in JB the next Saturday morning.  That's just not happening.




Are you sure it is not you who's growing and hence don't feel the 'buzz' the same way you used to?



notting said:


> One thing I don't understand is why local shops can't compete with  overseas internet sales, given they source their stuff from overseas just as we can?  GST is only 10% and other countries charge for that too, we usually can't avoid it




Rent and staff are two of the biggest cost for traditional retailers so it's extremely for them to compete on cost.


----------



## notting

*Re: JBH Loses it's Mojo*

I'm actually trying to convince myself that it might be a buy and that the retail shockers like David Jones and todays - Premier Investments downgrade are just due to the summer less summer, floods and cold cold winter and interest rates.  
An RBA that is way too focused on the housing market and mining instead of the rest of the in deep recession economy.  
That would mean that in a year JBH could have turned around.
No does not feel like that.
Solomon Lew's closing 50 stores, if it's just a blip, that's a big mistake.  He's a smart one so I doubt he is that mistaken. That's basic clothing. Buying cloths on line!? Surely not.  
Consumers are just not spending.  
Maybe generation Y has post crash trauma syndrome and their never going to be the job rejecting, credit binging,  boomer hating brat pack they were painted to be prior crises.  Gone from no idea about hardship to the opposite end.  Too shocking. Like the old men that used to tell us about the great depression, Gen X and Y will talk about the crises is this it. 
4% unemployment? Surely not.


----------



## RandR

quarterly update due this week I think.

All shall be revealed. Im opimistic it will be in line with forecasts, probably in the low-mid range though.


----------



## VSntchr

JB hi fi gross margin back up to 22%.

Seems they are increasing market share in a few categories.
Still reviewing report but so far its not so bad..

Their internet sales are going through the roof! Up over 50% in the latest period.


----------



## notting

It started heading down about 3.3% they had a broker on SKY Business talking about the fact that JB used to be a cash positive busness yet was now leveraged 100% leveraged in debt. I'm not sure if they were his exact words but something to that effect.
50% Internet sales of what % of sales? Sounds impressive in isolation THey may have sold 2Cds this time instead of 1 on the net.
Then Roger Montgomery came on and started talking about it being A1 and best retail in it's space etc. trading below intrinsic value etc The stock did a total U-turn.
Funny Love it.
It just confirms to my long held suspicions that Roger is in fact God I'm off to buy Lynus!  Too late it's already up.


----------



## RandR

notting said:


> It started heading down about 3.3% they had a broker on SKY Business talking about the fact that JB used to be a cash positive busness yet was now leveraged 100% leveraged in debt. I'm not sure if they were his exact words but something to that effect.




Lolz, what an idiot (the analyst) JBH debt is about $250m. The vast majority of which was used to buy back 10% of the shares on issue.

There still spinning awesome amounts of positive cashflow.

The results look impressive if you dont take into consideration the $$$ set a side for restructuring Clive Anthonys. Which has turned out to be a bit of a drag on the company and stock, but now that its mostly taken care of they can continue to focus on other things.

Will be interested to see how they go with there music streaming service set to start in FY12.


----------



## notting

As much as I do like JB. As a shop not a buy, The music streaming idea tossed up after the word restructure after the hot shot captain has moved on, Just rings alarm bells for me.
Like what? The netizens are going to flock to JBs website to stream music. You have to be joking


----------



## McLovin

notting said:


> As much as I do like JB. As a shop not a buy, The music streaming idea tossed up after the word restructure after the hot shot captain has moved on, Just rings alarm bells for me.
> Like what? The netizens are going to flock to JBs website to stream music. You have to be joking




I saw that, and wondered how long that will last. Unless there is some compelling reason to join JBH's streaming service I can't understand why anyone would. They are also getting outside their circle of competence. Their online store isn't even that great.


----------



## notting

Traditional old world retailers are just way out of their depth on line.  
They have no idea about that culture.
They'd be better off creating awsome coffee shops, or gimmicks of some sort like gamming competitions with prize money or prize PS3 every week, including a grand final to lure people in their doors.


----------



## zac

What caused JB Hi-fi to jump nearly a dollar today?
I was execting there to be a positive announcement but there arent any.


----------



## RandR

zac said:


> What caused JB Hi-fi to jump nearly a dollar today?
> I was execting there to be a positive announcement but there arent any.




Im assuming it was driven by the Bureau of Statistics report that stated Australian households are spending an average of $1200 a week. Despite the doom and gloom. I cant find you a link, but I remember reading it this morning.

But im not really sure. I think some retailers did actually look quite attractive in the last month. I was even looking at DJS  but didnt buy.

At one stage today JBH was up about 7% or so !


----------



## RandR

RandR said:


> Im assuming it was driven by the Bureau of Statistics report that stated Australian households are spending an average of $1200 a week. Despite the doom and gloom. I cant find you a link, but I remember reading it this morning.
> 
> But im not really sure. I think some retailers did actually look quite attractive in the last month. I was even looking at DJS  but didnt buy.
> 
> At one stage today JBH was up about 7% or so !





Ive just noticed the annual report is being delivered tomorrow.


----------



## brianwh

There is an online stockmarket newsletter, The Bull, which publishes a list of the most shorted stocks on the ASX each day. JBH has consistently topped this list over the past several weeks. 


http://www.thebull.com.au/


----------



## Ubershrewd

JBH has had the life shorted out of it for months now.


----------



## ROE

From my observation, JB store will report more store decline earning
going forward, lot of windows shopping not much at the checkout.

those Westfield rent start to get expensive


----------



## RandR

ROE said:


> From my observation, JB store will report more store decline earning
> going forward, lot of windows shopping not much at the checkout.
> 
> those Westfield rent start to get expensive




Its difficult to interpret store earnings though when the majority of stores being opened now are there less profitable 'tier 2' variety. Im not sure if rent is the most important issue for there business atm. As long as they contain there CODB  I think they'll be fine this year. With household savings backing up for the last 12-24 months I have a feeling it could be a big christmas period for the local retailers this year. Having dealt with Clive Anthonys last financial year might even see JBH suprise on the upside. But wait and see.


----------



## iced earth

JBH (JB Hi Fi)- 10.10.2011
==================================
Price has been corrected as far as %61.8 fibo ratio:





More importantly JBH has touched its valid  longterm support line, 




normally this support line should hold price from falling but if not we would see more downtrend from this Australia's Largest Home Entertainment Retailer


----------



## iced earth

TA of JBH 30-10-11
==========================

as I said before share had been touched the long-term support line around $14.00 which was at fibo 61.8% too. Also it has the horizontal support line (the green) which once was the resistance line of the share but when sp has been passed it up successfully now is acting as the support line.

But sp around $17.00 is facing the horizontal resistance level (peak in 2007-blue) and also the lower (red) line of the channel. if share would manage to pass these resistance levels we could see the sp above $20.00 (the upper red resistance line(upper line of the channel)




For more details:


----------



## iced earth

TA of JBH - 28 Nov 2011:
=================================
JBH has a strong support around $15.00 (the blue support line and previous low around 15). if this level works, the price could be anticipated to test 16.75 again.
but if price falls below 15.00 and stay there for more than 2-3 days, we could say we might are having the double top which the target would be around 14.00.




but more importantly, the price around 14-15 has a very important, valid long-term blue support line.
in this picture we could see the main white resistance line. in a normal situation JBH would move between these support resistance lines.


----------



## iced earth

Fundamental Analysis of “JB Hi-Fi Limited (JBH)” - Part 1 - 04/12/2011
================================================
General Information:

JB Hi-Fi Limited (JBH) is a specialty discount retailer of branded home entertainment products. The Group's products fall into consumer electronics, car sound systems, and music and DVDs and white goods. JBH does not operate a warehouse; instead all stock is delivered directly to each store and largely stored on the shop floor.

Company Strategy
Growth is driven by a store rollout program which adds around 13-15 sites per year with a long term goal of 214 national stores. The product mix is constantly revised to ensure competitiveness.

FY2011 financial statements:
Income statement Analysis:

Revenues:
Revenues in FY 2011 was 2,959 m$ compare to 2,731 m$ in FY2010 which shows 8% increment. Fig 1 shows that from 2003 to 2011, sales have been increased continuously. 
Consumer Electronics (CE) which represents around 75% of all sales grew by around 15% in FY2011.



Fig1 – Sales (Revenues)

Cost of goods sold and Gross margin:
In FY2011, the Gross margin was 22.03% compare to 21.76% in FY2010 which shows around 1% improvement. This consistency shows that JB HiFi has its own reliable supplier and has a Gross margin around 22% to follow. (Fig 2)



Fig2 – Gross Margin

Improving the gross margin , increased the gross profit of the company by 10% to 652m$ in 2011 from 594.2$ in 2010 (Fig 3) . (Combination of 8% improvement in Sales and 1% improvement in Gross margin)



Fig3 – Gross Profit

Operating Income:
As we saw sales was up only 8% in 2011 from 2010, because of the better gross margin, Gross profit was improved by 10%. Now we could see that operating income has been improved further by 12% in 2011 compare to 2010.It shows that company could successfully manage to keep the operating costs and cost of doing business  lower than before. (Fig4)



Fig4 – Operating Income

As we mentioned above, we see the operating margin which was 6.62%, improved by 3% from 6.40% in FY2010. This margin has been improved continuously from 2006 (fig5) which is very interesting.



Fig5 – Operating Margin
=============================
 End of Part 1


----------



## iced earth

Fundamental Analysis of “JB Hi-Fi Limited (JBH)” - Part 2 - 06/12/2011
==============================================
_*
Interest expense:*_
Interest expense was 6m$ in FY2011 compare to 5.4m$ in FY2010 (FIG 6). Company predicted that will have 13m$ -15 m$ interest expense.  This is because of “Share Buy-Back “plan that company had in 2011 and its long-term debt became increased. We will consider this in predicting FY2012 Company’s performance.as the result of this buy-back , number of “share outstanding” decreased which will increase EPS and ROE as we will study in details. 



 Fig6 – Interest Expense

_*Net Profit:*_
Net profit has been decreased by 8% from 118.7m$ in 2010 to 109.7 m$ in FY2011. We saw that operating income was up by 12% in 2011 from 2010. This unusual cut for net profit happens because of $33.35 m$ cost for “restoring Clive Anthonys stores”. This was only one-off charge and it is reasonable to take it out from the 2011 performance in order to compare it with previous years and FY2012 prediction. From now on we have the assumption that we exclude this charge from FY2011 performance. 

With taking out $33,352.00 for “restoring Clive Anthonys” expense which had after tax  effect on final profit by 24.72 m$, we would reach to Net profit of 134.4m$ in FY2011 which is improved by 13% compare to FY2010 (fig 7).
We also see continues improvement of Net profit of JB HiFi from 2003 to 2011 which is admirable and interesting. 



Fig7 – Net Profit

These outstanding results had been accomplished by increasing the “sales” and at the same time keep the “margins” improved. In Fig 8 we could see that Net profit margin has been improved from 2006 to 2011 continuously. This ultimate margin was 4.54 in FY 2011 compare to 4.35 in 2010 which shows considerable 5% improvement. This margin was merely 2.73% in 2006. (Fig 8)



Fig8 – Net Profit margin


----------



## McCoy Pauley

Tremendous stuff, iced earth.  KUTGW.


----------



## iced earth

McCoy Pauley said:


> Tremendous stuff, iced earth.  KUTGW.




Thanks McCoy Pauley.

I'm glad you find them useful


----------



## iced earth

Fundamental Analysis of “JB Hi-Fi Limited (JBH)” - Part 3 - 09/12/2011

_*
EPS:*_
EPS was 124.7 cents per share in FY2011 up 14% from 109.7 cents per share in FY 2010.
Fig 9 shows the EPS from has been increased from 2003 to 2011 which shows the success of JB HiFi business model.



Fig9 – EPS

The 124.7 was accomplished because of the increasing the Net profit to 134.4 m$ and also reduction in “share outstanding “ due to company buy-back plan which reduced the average “shares outstanding” in FY2011. Fig 10 shows the “shares outstanding” from 2003 to 2011.But we should keep on mind that the average of the share outstanding has been used for EPS calculation for every FY.
This new number of shares will be applied for FY2012 for EPS and DPS calculation. Which will increase EPS and DPS but in the cost of increasing debt & interest expense and also reduction in shareholders’ equity which we will study in the following sections.




Fig 10 – Shares Outstanding

_*
DPS:*_
Dividend was paid to each share in FY2011 was 77cps , up 17% compare to 66cps in FY 2011.
Fig 11 shows DPS paid to shareholders from 2003 to 2011, we could see continues improvement in DPS which shows a good return to investments during these years for shareholders.
The company announced that it has paid 60% of its Net Profit (exclude one-off charge = 134.4m$). it means that company has paid around 80.64 m$ to its shareholders, with a simple math we could reach to the average number of shares equal to 104.7 million shares in 2011 which received dividends. This reduction in numbers of shares was due to buy-back program which happened in FY2011.



Fig11 – DPS


_*
DPS/EPS:*_
JB HiFi has paid 62% of its EPS to shareholders in FY2011. In FY2010 this ratio was 60%.
Fig12 shows this ratio from 2004 to 2011. The board announced that they will grow dividends in line with earnings. We will assume that 60% of EPS will be given as dividend to shareholder in FY2012.



Fig12 – DPS/EPS


----------



## iced earth

*Fundamental Analysis of “JB Hi-Fi Limited (JBH)” - Part 4 - 12/12/2011*
==============================================
_*Balance sheet Analysis:*_
_*Assets:*_
The Asset part of JB HiFi balance sheet from 2008 to 2011 could be seen in Table-1.the changes from FY2011 from FY2010 is calculated in the last column.

​ _*Table 1 – Assets​*__*
Cash and the Equivalents:*_
The cash was 27.2 m$ which has been decreased by 47% in FY2011 compare to 51.7 m$ in fy2010. We could assume that part of this reduction was happened because of 33.35 m$ “restoring Clive Anthonys “charge.

_*Inventory:*_
Due to  the kind of business, Inventory is the most prominent number in Current asset for JB HiFi. This figure was 406.9 m$ increased by 22% from 334.8m$ in FY2010.(Fig 13)


​_*Fig13 – Inventory, Current and Total Assets (m$)​*_

The inventory has a direct relation with the number of the stores. When a new store is open, it will increase the inventory (products in hand which will be sold) . with normalising the inventories with store numbers we see that inventory value in FY2011 was very near to the average inventory normalised by shares numbers. (Fig 14)


​_*Fig14 – Inventor per Stores*_

Total current asset was 501.1 m$ in FY2011 compare to 454.5 m$ in FY2010 which shows 10% increment. Total assets was 767.1 m$ in FY2011 compare to 714.3 m$ in FY2010 (7% up) (Fig 13)

_*Liabilities:*_
The Liability part of JB HiFi balance sheet from 2008 to 2011 could be seen in Table-2.the changes from FY2011 from FY2010 is calculated in the last column.



_*Table 2 – Liabilities​*_
The current liabilities has been reduced by 5% to 345.9m$ from 363.1 m$ in FY2010. But the total liabilities was up by hefty 46% in 2011 (From 421 m$ in FY 2010 to 614.8m$ in FY 2011). The reason for this as we could see in the table, was because of increment of Long-Term Debt from 34.7m$ in FY 2010 to 232.9m$ in FY2011 (up more than 570 %!). (Fig 15)

​_*Fig15 – Liabilities (m$)​*_
The reason that Long-Term debt increased by 570% is due to company share  Buy-Back plan in 2011 which was completed by purchasing 10.8 million shares with 173.3 m$ value.
The fund for this buy back considers as Long-Debt.
The reduction in “Shares Outstanding “(Fig 9) will improve EPS, DPS and ROE (Return on Equity)  but at the same time Long-Term Debt and Interest expenses will be increased (as announced by company  FY2012 Interest expense will be in the range of 13m$ to 15m$ ). These should be considered in 2012 performance prediction.


----------



## ROE

ROE said:


> From my observation, JB store will report more store decline earning
> going forward, lot of windows shopping not much at the checkout.
> 
> those Westfield rent start to get expensive




You cant beat scuttle butt technique from Uncle Phil Fisher 

http://www.theage.com.au/business/little-christmas-cheer-for-jb-hifi-20111215-1owh5.html


----------



## McLovin

Weren't same store sales negative for FY11 too? Or is that my imagination.

Hardly surprising that margins are starting to get squeezed. Opening up new shops with diminishing returns while existing stores are going backwards.

The price deflation in flat panels is amazing. I wonder what will happen if the Koreans start doing it with other browngoods or even whitegoods.


----------



## iced earth

_*Fundamental Analysis of “JB Hi-Fi Limited (JBH)” - Part 5 - 16/12/2011*_
==============================
*Liquidity ratios:*
With calculating these ratios we could have an understanding of the company’s ability to liquid quick enough to pay its short term liabilities. 
_*
1-	Current ration and Quick Ratio:*_
In 2011 current ratio was 1.45 compare to 1.25 in FY2010 but quick ratio (which we have taken Inventory out of current assess) in FY2011 was 0.27 compare to 0.33 in FY2010.
 The most noticeable reason for this is increasing the inventory as we mentioned earlier. 

At the first look we might be worry about these low ratios, but when we compare these numbers with previous years and the averages, there is no unusual about these ratios. (Fig 16) .




*Fig16 – Current and Quick Ratios*

As a general rule when we want to compare liquidity ratios we should consider the kind of business. Also if this ratios are too high, it could show that company cannot utilise its assets (or not using enough borrowing, Leverage) in order to produce profit.  
_*

2-	Debt Ratio:*_
This ratio calculates as total debt dived by total assets and shows the leverage company has used. The more of this ratio is more risk company willing to accept in order to generate profit by utilising the leverage (Debt).
Debt Ratio was 80% in FY2011 compare to 59% in FY2010. This increasing was because of increasing of the Long-Term debt of the company due to its share buy-back plan in FY2011.
JB HiFi should be careful not to let debt increase more or the risk of company to repaying its debt would be increased.  (Fig 17)



_*Fig17 – Debt Ratio*_
To have better understanding of the company liquidity we calculate the “Cash Conversion Cycle”
_*

3-	Cash Conversion Cycle (CCC):*_
This could show the length of time (in days) that a company uses to sell the inventory, collect receivables and pay its accounts payable. 
To calculate CCC we should calculate below ratios first:
•	DIO (Days Inventory Outstanding) : this gives us how many days would take that Inventory turns  to sales (as cash or payment receivables)
DIO for FY2011 was 58.7 Days compare to 56.3 Days in FY2010. This was 59.7 Days in FY2009, shows that  JBHifi turns its inventory around 55-60 days to sales (average).
This only should  be compared with the same business if we want to have a valid comparison and  commentary, but it shows consistency on this figure. 
•	DSO (Days Sales Outstanding): this numbers give how many days would take (average) company to collect on sales that go to account receivables. 
For JBH , DOS in FY2011 was 1.3 days compare to 1.5 days in FY2010 which is very short time. This shows that most sales in JB HiFi have been done as cash sales and paid immediately. This eliminate the risk of having bad creditors and problems with too much and long-time Account Receivables.
•	DPO (Days Payable Outstanding) : this shows after how many days (average) company is paying its payables to suppliers
DPO was 21 days in FY2011 compare to 44.6 days in FY2010 and 50.4 days in FY 2009. It shows company is paying its payables to suppliers sooner than before. 
•	CCC(Cash Conversion Cycle) :
•	This could show the length of time (in days) that a company uses to sell the inventory, collect receivables and pay its accounts payable. 

CCC is combination of DIO,DSO and DPO. CCC was 81 days in FY2011 compare to 102.3 days in FY2010 and 112.1 days in FY2009.

This shows that company ability to sell its inventory is improving. Company has sold its inventory 20% quicker than 2010 which is a considerable improvement to turns its inventory to sales, collect receivables and pay its accounts payable. (Fig 18)



_* 
Fig18 – Cash Conversion Cycle (Days)*_

_*Profitability Ratios:*_
These ratios show how effectively company use its resources to generate profit. We already have studied the Gross margin, operating margin and Net profit margin. 
_*

ROA (Return on Assets):*_
This figure shows how profitable a company is relative to its total assets. ROA was 18.14% compare to 17.25% in FY2010 and 15.77% in FY 2009.
The company has a healthy and improving ROA. (Fig 19)



_*Fig19 – ROA*_


_*ROE (Return on Equity):*_
This figure shows how profitable a company is compare to its average shareholder equity.  ROE was 60.3% compare to 45.4% in FY2010. JB HiFi has always had a strong ROE. In FY2011 the outstanding improvement for this ratio was more because of Equity reduction due to Long-Term debt increment as share buy-back plan performed. So also the profitability compare to equity has improved but there was a cost of Long-Term debt increment. 
The company has a healthy and improving ROA. (Fig 20)



_*Fig20 – ROE*_


----------



## Chasero

Profit downgrade today.

This was AFTER they said xmas time should bring in stable growth compared to last yr lols.

Guess this is the reason it's in the top 10 shorted stocks list?

Poor retail stocks can't get a break


----------



## craft

iced earth said:


> _*CCC is combination of DIO,DSO and DPO. CCC was 81 days in FY2011 compare to 102.3 days in FY2010 and 112.1 days in FY2009.
> 
> *_



_*

CCC = DIO + DSO minus DPO

Really well presented analysis but what does all this history tell you about the future?*_


----------



## silence

Wow yes quite a drop today. I can't say I'm that surprised though, as at least here in Hobart all big retail stores were extremely empty up until a month or so ago.

Regardless of the general retail economy, they just can't compete with the internet / amazon and more and more people are realising they don't need to get stiffed by Aus retailers unless it's a large heavy item that can't be posted for a reasonable cost.

Disclosure, I don't hold, sold out at about $15.


----------



## YELNATS

ROE said:


> You cant beat scuttle butt technique from Uncle Phil Fisher
> 
> http://www.theage.com.au/business/little-christmas-cheer-for-jb-hifi-20111215-1owh5.html




Hardly a surprising downgrade and in fact they have probably done well to limit it to what it is. Trading conditions in retail for this year have absolutely been atrocious, I should know as a retailer. And it all started in March 2008 and has only gotten worse.

Maybe the last two 25 basis points interest rate reductions will help a little.


----------



## Chasero

Ouch!!

David jones profit downgrade saw it drop ~20% right in 2 days?

JBH looks like it's going to do the same!!


----------



## skc

Chasero said:


> Ouch!!
> 
> David jones profit downgrade saw it drop ~20% right in 2 days?
> 
> JBH looks like it's going to do the same!!




Here are a few comparison (from WebIress).

Code / Trailing PE / Div yield / Price to Assets

DJS / 8.36 / 10.14% / 2.03
MYR / 8.47 / 9.7% / N/A
HVN / 8.84 / 5.71% / 0.96

JBH / 14.74 / 5.13% / 26.32 (before today)


----------



## Chasero

skc said:


> Here are a few comparison (from WebIress).
> 
> Code / Trailing PE / Div yield / Price to Assets
> 
> DJS / 8.36 / 10.14% / 2.03
> MYR / 8.47 / 9.7% / N/A
> HVN / 8.84 / 5.71% / 0.96
> 
> JBH / 14.74 / 5.13% / 26.32 (before today)




I only know what Dividend yield means 

What does P/E mean?

I wiki'd it being:

A valuation ratio of a company's current share price compared to its per-share earnings.

Calculated as:

Market Value per Share/Earnings per Share (EPS)


*Lost*!!



What does P/E reflect?

The higher the better?

I noticed that MQG became a substantial shareholder of JBH on 15/12/11, one day before the share price dropped 15% in value?! Though not sure what an FPO is...


----------



## skc

Chasero said:


> I only know what Dividend yield means
> 
> What does P/E mean?
> 
> I wiki'd it being:
> 
> A valuation ratio of a company's current share price compared to its per-share earnings.
> 
> Calculated as:
> 
> Market Value per Share/Earnings per Share (EPS)
> 
> 
> *Lost*!!
> 
> 
> 
> What does P/E reflect?
> 
> The higher the better?
> 
> I noticed that MQG became a substantial shareholder of JBH on 15/12/11, one day before the share price dropped 15% in value?! Though not sure what an FPO is...




FPO = fully paid oridinary shares. Means basically a normal share (as opposed to partly paid shares, or preference shares etc).

P/E = Share price / earnings. It reflects how much the last buyer was willing to pay in multiples of a company's earning. Imagine your local coffee makes $50k a year... how much will you pay for that business? $150k? Then you've just applied a P/E of 3. 

It's a simple ratio but it's interpretation are varied. High P/E may mean the share price is expensive relative to earning, or it may mean that people are paying a high multiple because earnings are likely to grow in future years.


----------



## Chasero

skc said:


> FPO = fully paid oridinary shares. Means basically a normal share (as opposed to partly paid shares, or preference shares etc).
> 
> P/E = Share price / earnings. It reflects how much the last buyer was willing to pay in multiples of a company's earning. Imagine your local coffee makes $50k a year... how much will you pay for that business? $150k? Then you've just applied a P/E of 3.
> 
> It's a simple ratio but it's interpretation are varied. High P/E may mean the share price is expensive relative to earning, or it may mean that people are paying a high multiple because earnings are likely to grow in future years.




Wow, thanks for that.

I think I'll keep on the sidelines on JBH.. for now.


----------



## Chasero

Chasero said:


> Wow, thanks for that.
> 
> I think I'll keep on the sidelines on JBH.. for now.




Anyone think JBH will bounce off $12?

I think it's extremely oversold atm.. $12 is a 2 yr low isn't it?

Oh well, I bought a small parcel today.


----------



## skc

Chasero said:


> Anyone think JBH will bounce off $12?
> 
> I think it's extremely oversold atm.. $12 is a 2 yr low isn't it?
> 
> Oh well, I bought a small parcel today.






Chasero said:


> I think I'll keep on the sidelines on JBH.. for now.




Patience is not your style, is it? 

When you say bounce do you mean $12 is support or resistance?

Fundamentally, a conservative view might be that JB's growth phase is finished, and the industry will continue to experience margin compression. What multiple would people (not you, but others) put on a share that has flat to falling profit?

That's probably a sensible base line imho. Anything substantially below that would make it a buy opportunity.


----------



## Chasero

skc said:


> Patience is not your style, is it?
> 
> When you say bounce do you mean $12 is support or resistance?
> 
> Fundamentally, a conservative view might be that JB's growth phase is finished, and the industry will continue to experience margin compression. What multiple would people (not you, but others) put on a share that has flat to falling profit?
> 
> That's probably a sensible base line imho. Anything substantially below that would make it a buy opportunity.





$12 as support.

I see, thanks for your view


----------



## McCoy Pauley

An interesting article from Business Spectator predicting the demise of JBH:

http://www.businessspectator.com.au...nline-s-pd20120102-Q4UFW?OpenDocument&src=sph


----------



## Chasero

McCoy Pauley said:


> An interesting article from Business Spectator predicting the demise of JBH:
> 
> http://www.businessspectator.com.au...nline-s-pd20120102-Q4UFW?OpenDocument&src=sph




No pls.

Holding long @ $12 looking for an exit!!


----------



## Tyler Durden

McCoy Pauley said:


> An interesting article from Business Spectator predicting the demise of JBH:
> 
> http://www.businessspectator.com.au...nline-s-pd20120102-Q4UFW?OpenDocument&src=sph




Thanks for that, it was a good read. I agree with the gist of the article, however I'd like to spread the vibe to a more general level amongst all retailers. I just don't have confidence in MYR or DJS anymore. Things were barely discounted during the xmas and New Years' sales, and even the amount of people browsing seems to have decreased.

The other day I was travelling up the escalator in MYR, and thought "bloody hell, why do I have to travel up 8 floors to get what I want?"

These days, everyone wants everything now. It takes 2 minutes to do an internet search, maybe an additional minute to price compare. That is a lot better than fighting your way up 8 levels in a department store (especially as people get more lazy).


----------



## oldblue

> The other day I was travelling up the escalator in MYR, and thought "bloody hell, why do I have to travel up 8 floors to get what I want?"




I came to that conclusion in Myer many years ago!

Not a desirable retail experience, IMO.


----------



## skc

oldblue said:


> I came to that conclusion in Myer many years ago!
> 
> Not *a desirable retail experience*, IMO.




That's an oxymoron


----------



## Chasero

oldblue said:


> I came to that conclusion in Myer many years ago!
> 
> Not a desirable retail experience, IMO.




I actually went to the boxing day sales.. and compared to last years, there was virtually no difference in pricing.

Even though they claimed this would be the biggest year for discounts ever! 

I'd rather shop online lol.


----------



## McLovin

Chasero said:


> I actually went to the boxing day sales.. and compared to last years, there was virtually no difference in pricing.
> 
> Even though they claimed this would be the biggest year for discounts ever!
> 
> I'd rather shop online lol.




A few days ago I went to an outlet mall about an hour from NYC. As an example here is what I bought from Timberland.

1x pair of boat shoes
2x jumpers
1x hoodie
1x tshirt
1x button up shirt

Total cost $180

In Australia, even during sales that would have probably cost me ~$400. Everything was "in stock", ie it wasn't the left overs that no one wanted to buy on the Main Street and they were all premium brands (Lacoste, Armani, Polo, Guess, A&F, A&E -- 130 stores all up) not the cr#p that passes for factory outlets in Australia. They had those North Face bubble goose jackets for $55, the ones Kathmandu sell for $500. I spent about $600-$700 on the day but probably bought about $5,000 worth of stuff if I had done it in Australia. 

According to Gerry Harvey's logic, if I get pulled up at Customs then I will whinge and complain and not do it again because I will get charged GST.


----------



## notting

Unless I try something on I can rarely tell what the thing is going to look like, so clothing shops should be OK unless you try on then go home an buy online. 
But if the shops become extinct not even that will be possible.
They need to create gimmiks to get young people in stores.
I never buy pop corn at the supermarket but I buy a bucket load when I go to the movies at rip off prices!


----------



## McLovin

notting said:


> Unless I try something on I can rarely tell what the thing is going to look like, so clothing shops should be OK unless you try on then go home an buy online.
> But if the shops become extinct not even that will be possible.
> They need to create gimmiks to get young people in stores.
> I never buy pop corn at the supermarket but I buy a bucket load when I go to the movies at rip off prices!




I don't have a problem buying clothes on the internet. I've done it for years and I know my size but I take your point. However, what I was really getting at is that it is symptomatic of retail generally in Australia.


----------



## Chasero

Chasero said:


> No pls.
> 
> Holding long @ $12 looking for an exit!!




Finally, no more RED in my portfolio as of today.

JBH rally here we come!

Still can't believe it dropped to ~$11 tbh


----------



## NoMoreChillies

watching JBH drop to $11 made it buy for me today, although i am watching it very closely.


----------



## tinhat

NoMoreChillies said:


> watching JBH drop to $11 made it buy for me today, although i am watching it very closely.




Good luck to you but I've given up on trying to catch falling knives. Even at that price the yield doesn't justify the risk to my capital. Shrinking margins, slow to no growth. Uncertain outlook for industry. Dick Smith to be offloaded by Woolies. Not a stellar outlook. Looking at the chart there is nothing in the TA giving a buy signal except for a very short run play as the price should bounce off the lower boundary of the Bollinger band.


----------



## notting

JB seems especially vulnerable as the clientele were the savvy ones who new where to get the best prices over the years, whereas the Harvey Normal people where just the zombies who followed the "No Interest Nothing to Pay" - con. 
So the savvy's would be savvily turning to the internet for even better deals. Hence JB could be even worse off than Normal. As buy by remote control becomes the new Normal.


----------



## Tightwad

jb's increased its online sales by about 87% last time.. still retail is being hammered.

It sounds cheap and there are few bullish on it, but its too long a wait until retail kicks off again.


----------



## Nutmeg

Tightwad said:


> jb's increased its online sales by about 87% last time.. still retail is being hammered.
> 
> It sounds cheap and there are few bullish on it, but its too long a wait until retail kicks off again.




There was an interesting article today in the Fin Review. Bain & Co, a management consultant firm, conducted a study into Australian retailing.  As you would all know, the mark up that Australia retailers make compared to retailers in equivalent markets abroad is between 25% and 50% higher.  The Bain & Co study concluded that the real cause of the pressure that Australian retailers are presently under arises not from leakage to the internet as such but from "_price transparency_", i.e. the ability to compare prices for the same item in Australia and abroad on the internet.  That price comparison then leads to purchases from online retailers is a consequence rather than a cause of leakage to the internet.  Be that as it may, the fact remains, in my view, that bricks-and-mortar retailing is simply never going to be able to compete with an online retailer.  The latter needs nothing more than a large warehouse and skeletal staff to run an extremely lean business.


----------



## zac

I think the bricks and mortar type stores have the advantage when it comes to larger consumer goods, ie white goods, large tv's or other long term purchases.
Reason being is that theyre hard to get online due to size, delivery etc.
Having said that, these items probably wouldnt make more than 20% of their sales im guessing.
Its the smaller everyday type items I bet that stores like JB Hi-Fi were doing so well in, ie ipods, cameras, movies, etc


----------



## Tyler Durden

zac said:


> I think the bricks and mortar type stores have the advantage when it comes to larger consumer goods, ie white goods, large tv's or other long term purchases.
> Reason being is that theyre hard to get online due to size, delivery etc.
> Having said that, these items probably wouldnt make more than 20% of their sales im guessing.
> Its the smaller everyday type items I bet that stores like JB Hi-Fi were doing so well in, ie ipods, cameras, movies, etc




Not even movies. My friend told me he goes there just to check out what to download. And when I told other people that I couldn't find a movie there, they all told me to download it.


----------



## Garpal Gumnut

The chart looks pretty crook, lower lows and lower highs.

It will need to get a move on volume wise sideways + or - up with a price rise before I would look at it.

gg


----------



## Nutmeg

zac said:


> I think the bricks and mortar type stores have the advantage when it comes to larger consumer goods, ie white goods, large tv's or other long term purchases




I agree to an extent.  However, one of the consequences of price transparency is that consumers are increasingly using bricks-and-mortar retailers as mere showrooms of the goods that consumers want to buy and then purchasing the identical item online at a cheaper price.  I don't immediately see why bulky whitegoods, say, will be spared that fate any more than CDs and DVDs, the retailers of which are already experiencing it.  There is simply no way that HVN with its enormous overheads relative to an Amazon-like online retailer is going to be able to compete on price in the long term.


----------



## McLovin

skc said:


> Here are a few comparison (from WebIress).
> 
> Code / Trailing PE / Div yield / Price to Assets
> 
> DJS / 8.36 / 10.14% / 2.03
> MYR / 8.47 / 9.7% / N/A
> HVN / 8.84 / 5.71% / 0.96
> 
> JBH / 14.74 / 5.13% / 26.32 (before today)




Our old friend PE compression is alive and well. It made no sense for JBH to be on that multiple, as if it was somehow immune to the retailing downturn. JBH reporting today that profit will be up to 9% lower than last year.


----------



## odds-on

I am tempted to open a CFD account to start taking a leveraged long position on this stock. Div yield > PE ratio, everybody is down on JBH and apparently it is the most shorted stock on the ASX. What more do you need to know?


----------



## Ves

McLovin said:


> Our old friend PE compression is alive and well. It made no sense for JBH to be on that multiple, as if it was somehow immune to the retailing downturn. JBH reporting today that profit will be up to 9% lower than last year.



I agree that PE compression was needed, however of those businesses with P/E listed in the post that you quoted do you think any of the others are close to having a 'competitive advantage'?  It remains to be seen whether JBH is a true low cost competitor, the blackest times are probably still ahead, but if it does have such a competitive advantage it may be worth watching the margins (and possible recovery) over the next 12-18 months. Another wave of capitulation selling might make it compelling.


----------



## skc

odds-on said:


> I am tempted to open a CFD account to start taking a leveraged long position on this stock. Div yield > PE ratio, everybody is down on JBH and apparently it is the most shorted stock on the ASX. What more do you need to know?




This is the perfect plan for disaster. Please don't do it. If you must buy this stock, buy it with money you have and take a loss on the next profit downgrade.

Don't leverage without a stop. Because crazier things happen in the market... and JBH keeps falling would not be considered crazy at all.



Chasero said:


> Still can't believe it dropped to ~$11 tbh




Like this... it's pretty hard to believe now, isn't it?



Ves said:


> I agree that PE compression was needed, however of those businesses with P/E listed in the post that you quoted do you think any of the others are close to having a 'competitive advantage'?  It remains to be seen whether JBH is a true low cost competitor, the blackest times are probably still ahead, but if it does have such a competitive advantage it may be worth watching the margins (and possible recovery) over the next 12-18 months. Another wave of capitulation selling might make it compelling.




Here's is a quick anecdote on competitive advantage. 

There are 4 items on the JBH online shop, front page. I am going to search for same items online elsewhere and see what competitive advantage JB has.

1. Soniq 46" HD LED LCD TV (E46Z11A), $698.
Selling for $699 at Penta.com.au.

2. Teac 26" LCD Combo TV (1366x768), $299.
Selling for $309+$18 delivery at Billy Guyatts.

3. HP Pavillion 15" Notebook (G6-1310AX), $598.
Same price at officeworks.

4. Nikon J1 10-30VR (white), $646.
~$520 on ebay. $314 at Becextech. (Crazy price actually).

Competitive advantage = zilch.

It is scary that the CEO said in the recent trading update...



> We anticipate that this level of discounting will continue over the next quarter but we *do not believe *that this is a long term structural change




The forecast is for full year sales of $3.1B (H1 = $1.77B) and NPAT of $100-105m (H1 = $80m). This means JBH forecast to make a tiny $25m in H2. With H2 NPAT of $25m, you can back out the EBIT to be ~$25/0.7 + $5.5 (interest) = $41m, so EBIT margin is now 3.1%.

If they match their competition on price above, there will be no EBIT margin left. If they don't match the price, they will either have to drive down costs (of which they were good at but you wonder how much further can they do it), or lose market share. 

New store opening has already slowed. There were 157 stores at end of FY11. Target for FY12 was 172 but there are only 161 open as of last up date. Without increasing scale it's hard to drive the CODB down.

If margin doesn't improve (and I for one see no season why it would improve), you can easily see full year FY13 NPAT ~$60m, which puts JBH on a much over-valued PE multiple of 15-16x at today's prices.


----------



## Chasero

Yep, I cut my losses with JBH a while ago.. hit stop losses 

Market is telling you one thing: it's shorted by a good % for a reason.

Market is always right. Learned big time from that trade.


----------



## notting

odds-on said:


> I am tempted to open a CFD account to start taking a leveraged long position on this stock. Div yield > PE ratio, everybody is down on JBH and apparently it is the most shorted stock on the ASX. What more do you need to know?




People were saying stuff like that when it was 17.
Take a look at the history of WAN, now SWM, came from about there and is now 3!

Simply because it suddenly appears compelling using historical multiples compared to current and hoping that the forward projections are still dependable is a stretch in an environment that has changed dramatically for retail and advertising - which do have a close relationship.

Social media and consumer discretion has made giant leaps in terms of how impulse buying is now a very different animal to feed as instant alternatives appear for people, even reviews which alter their behavior!

Hence the old controls have become unreliable using traditional marketing techniques and so have the subsequent behaviors of consumers, not to mention the massive increase in alternative places and ways to get what you want at even cheaper prices.

What is a successful model in this new environment?  We still can't argue with Apples numbers and ability to appear unique with cult like seductive quality *carefully controlled* and crafted from production to sale!

'Times still are a changen' like the suits to 60s and it's hard to pick 'who that it's naming!!'


----------



## Chasero

Retail = down

Gold stocks = down

Oil = mediocre

Graphite = running.

That's my consensus after reviewing my April watchlist.

All my graphite stocks have run and run hard.

I've sold all my retail stocks long ago.


----------



## McLovin

Ves said:


> I agree that PE compression was needed, however of those businesses with P/E listed in the post that you quoted do you think any of the others are close to having a 'competitive advantage'?




Yes, DJS. I'm sure it's not the consensus though. I'm skeptical JBH has much of a real competitive advantage.

I'm sure I've posted this here or in one the FA threads but it's an interesting perspective on JBH and HVN.

http://brontecapital.blogspot.com.au/2011/12/forthcoming-irrelevance-of-australian.html


----------



## So_Cynical

skc said:


> It is scary that the CEO said in the recent trading update...
> 
> _"We anticipate that this level of discounting will continue over the next quarter but we do not believe that this is a long term structural change"_






Yep i noticed that to, stuck out like dogs balls hey...my immediate thought was that this guy really doesn't know what's going on, he's stuck in the old model, its been good to him and its all he knows.

I always find it disconcerting how so many smart and successful people don't seem to know when it's over or it's time to go.


----------



## McLovin

skc said:


> Here's is a quick anecdote on competitive advantage.
> 
> There are 4 items on the JBH online shop, front page. I am going to search for same items online elsewhere and see what competitive advantage JB has.
> 
> 1. Soniq 46" HD LED LCD TV (E46Z11A), $698.
> Selling for $699 at Penta.com.au.
> 
> 2. Teac 26" LCD Combo TV (1366x768), $299.
> Selling for $309+$18 delivery at Billy Guyatts.
> 
> 3. HP Pavillion 15" Notebook (G6-1310AX), $598.
> Same price at officeworks.
> 
> 4. Nikon J1 10-30VR (white), $646.
> ~$520 on ebay. $314 at Becextech. (Crazy price actually).
> 
> Competitive advantage = zilch.




That sort of pricing would lead one to believe they do have a competitive advantage. I think it's more of a "convenience advantage".


----------



## skc

McLovin said:


> That sort of pricing would lead one to believe they do have a competitive advantage. I think it's more of a "convenience advantage".




Are you saying they can (or think they can) charge same/higher because of their advantage in brand/convenience/trust? I guess we can't really tell because we don't know how their sales are for those items.

But the traditional advantage of JB is clearly price leadership... and I think the evidence is that it isn't that much of an advantage on the online arena.


----------



## McLovin

skc said:


> Are you saying they can (or think they can) charge same/higher because of their advantage in brand/convenience/trust? I guess we can't really tell because we don't know how their sales are for those items.




No, I'm saying their ability to charge a premium would be evidence (but not conclusive) of a competitive advantage (ie it's something you'd look for as proof it exists not to disprove it), that perhaps they have built their brand to the point where people go there _assuming_ it will be the cheapest. Clearly they are not, which is why I think it's a convenience advantage ie if you're too lazy you shop there. That will slowly be eaten away at. Hempton makes the point in his blog about how they spend a fortune trying to look cheap. It's really hard to be the price leader (and earn economic rent) when your competitors are probably buying the same products off the same supplier for the same price.

JBH is in the same buying group as all these companies...



> 2nds World • Betta Electrical • Bi-Rite Electrical • Bing Lee • Bing Lee Sony Centre • Carlson Marketing Group
> Clive Anthonys• David Jones • Downtown Duty Free • JB Hi-Fi • Nuance Group
> Radio Rentals• Ted’s Camera Stores • Whitfords of Five Dock • Winning Appliances






skc said:


> But the traditional advantage of JB is clearly price leadership... and I think the evidence is that it isn't that much of an advantage on the online arena.




Yes, for that reason, I think they're screwed.


----------



## mrlister

Seems as though you had to shop around a bit for competitive prices, however jb has all under one roof. Plus, people still want to buy a large purchase ie TV from an actual shop. Warranty issues are too hard otherwise. I stopped going to jb as all the peripherals were too expensive. Which turned me off considering them for any other sales. There still is a place for them, but may not be in expensive real estate!!


----------



## odds-on

skc said:


> If you must buy this stock, buy it with money you have and take a loss on the next profit downgrade.




Further profit downgrades?! The ASX prom queen really has started dating some dropkicks.


----------



## odds-on

McLovin said:


> Yes, DJS. I'm sure it's not the consensus though. I'm skeptical JBH has much of a real competitive advantage.[/url]




Interesting. DJS is another retail stock not getting much love from the investment community these days. I suspect all this uncertainty about the future of retail is driving prices down to a point where the downside risk over the medium term is minimal.


----------



## McCoy Pauley

So_Cynical said:


> Yep i noticed that to, stuck out like dogs balls hey...my immediate thought was that this guy really doesn't know what's going on, he's stuck in the old model, its been good to him and its all he knows.
> 
> I always find it disconcerting how so many smart and successful people don't seem to know when it's over or it's time to go.




The original CEO of JBH got out at the right time, and now the current CEO is left holding the pieces as JBH's share price crumbles.


----------



## confused01

We have been analysing the annual report for jb hi fi for 2011, unfortunately we cannot find any reference to preference shares or Return on shareholder’s equity - we need to ascertain what the preference dividend figure is. Can some one point us in the right direction, even a page number or link would help thanks


----------



## McLovin

What preference shares?

RoE is NPAT/Shareholders equity. You have to work it out yourself from the figures in the P&L and BS.


----------



## Bibimbap

What r people's views of its upcoming results? Dividend maintained?
Retail seems to be picking up. DJS shares also stronger?


----------



## skc

Bibimbap said:


> What r people's views of its upcoming results? Dividend maintained?
> Retail seems to be picking up. DJS shares also stronger?




Refer to HVN's recent trading update. Can't imagine JBH being too different.


----------



## Tannin

skc said:


> Refer to HVN's recent trading update. Can't imagine JBH being too different.




These two are VERY different. 

HVN is going backwards (a) because there is no money in retail electronics anymore, (b) because their main store of value (retail real estate holdings) is not looking so smart now that the glory days of retailing are over and retail rents are under strong downwards pressure, (c) because Australians are smarter about money than they used to be and are more likely to save than make unplanned purchases using very expensive credit, (d) because the Harvey Norman brand is no longer well-regarded and generally approved of by shoppers who often feel that they have been pressurised and sold to once too often, and (e) because the company leadership is absolutely clueless about the Internet sales revolution. HVN has stong asset backing, and will probably survive and even keep paying dividends in the short to medium term, but if it is to succeed over time then Gerry Harvey needs to reinvent the company and I don't think he's up to the task. 

JBH is going backwards because it specialises in electronics retail which is the worst possible thing to be selling these days - market saturation, prices keep on dropping and eroding margins, and electronics is _the_ natural Internet sales leader. That's a huge burden for a retailer to operate under. Where most other big retailers are busy closing unprofitable stores, or even closing down completely in the case of DSE, JBH are _still buying in!_ Yes, they are still opening new stores! That shows astonishing bravery. Or stupidity - I'm not sure which. Look at it this way - JBH might know something we don't, but I prefer to make my big, blind bets on things I can watch going around the track at Flemington or Randwick. It's more fun, and easier to pick the winner.

Still, they are alike in one respect: in their very different ways, they are both going backwards.


----------



## fanger

Does anyone have a technical view on JBH? I bought in at 8.90 then sold out around 9.80 and took profit hoping for a pull back to get in again but its just keep going higher.


----------



## Out Too Soon

Technical--JBH is in an uptrend trying to go sideways, not terribly exciting but worth watching.

Fundamental-- A few months ago I suddenly found myself needing WIFI dongles after a Telstra sales kid misled me 
    I ducked into Harvey N & a rude disinterested salesman eventually showed me one for $99 I said, Ã¯s that the cheapest?" He then grumpily showed me the other one in stock for $33    I then went to JB-HIFI where a friendly, helpful girl showed me their only  dongle for $66 

 I then went home & bought 3 perferctly good dongles for $5 ea off Ebay & waited a week for them to arrive.  

Lesson, wondering how on earth Electronic stores can survive without drastically changing their business model.


----------



## stevier95

Curious as to everyone's thoughts about JB HIFI. Down to $10 from its highs of $16 this year, although slightly above it's yearly lows of around $8. Is there any room for retail at the moment given Christmas is fast approaching, or could this prove to be a bit of a disappointment?


----------



## Smurf1976

If the fridge or washing machine dies then for most people that is approaching an emergency situation. If they have kids then it is an actual emergency. They will go to HVN etc and pay the asking price to get a new one delivered as soon as possible.

With the possible exception of mobile phones, which is a highly competitive market, JBH doesn't really sell anything that is commonly purchased under emergency conditions. Instead, consumers have plenty of time to shop around and, in most cases, purchase online instead.

I can't see the actual demise of the likes of DJS happening anytime soon. They will simply direct their efforts and floor space toward goods that sell better in a physical store environment and get out of things that aren't profitable. But JBH is primarily in the business of selling things which are well suited to selling online and which are of a commodity nature so they don't have that option.

You might compare an item of clothing at Myer, DJS and a couple of other stores as well and make a choice based on fit and appearance rather than price. But Windows 8 is Windows 8 and an iPhone 5 is an iPhone 5. You're just going to go for the cheapest price knowing that it's an identical product. There's no actual reason, other than the "have it right now" factor, why you'd pay more than the cheapest available price.

Overall, I just can't see that there's any good news for this type of retailer. Unless they are cheap, there's no real reason why anyone would even walk into the store in the first place.....


----------



## notting

Smurf1976 said:


> Unless they are cheap, there's no real reason why anyone would even walk into the store in the first place.....




Perhaps they could change their name to 'Try Before You Buy'. Sell coffee and snacks.
I went in on Sunday to try win 8. Wish Android would do a PC OS. It's better than Apple and windows.
I'm looking for total integration  on one platform - phone, PC, tablet, TV. None of em r quite there yet. 
Perhaps that could be part of the service - I-Integrate,


----------



## stevier95

notting said:


> Perhaps they could change their name to 'Try Before You Buy'. Sell coffee and snacks.
> I went in on Sunday to try win 8. Wish Android would do a PC OS. It's better than Apple and windows.
> I'm looking for total integration  on one platform - phone, PC, tablet, TV. None of em r quite there yet.
> Perhaps that could be part of the service - I-Integrate,




Apple is


----------



## ROE

Notting have you seriously use any of the Apple product?

you can get an iPhone, iPad, Macbook, iMac, Apple TV, iPod 
every single of them works extremely well with one another ... seamless
integration with a few touch


----------



## notting

ROE said:


> Notting have you seriously use any of the Apple product?
> 
> You can get an iPhone, iPad, Macbook, iMac, Apple TV, iPod
> every single of them works extremely well with one another ... seamless
> integration with a few touch




OK for a manic rant -

Uuuum well .....
I have an IPhone which is an overpriced joy, I have an Ipad which I do not like nearly as much as my Asus Eeepad which at first seemed less sexy but time with both has taught me that Android spanks Apple software and even the physical feel of it has outshone the the Ipad over time. That surprised me!

I have a Mac Air which is not as nice to use as my Eeepad either, although it is most impressive when connected to my 27" AppleThunderbol display, although it really pissed me off that the display will only work to full capacity when the fricken Air's lid is down.  Meaning I had to purchase a touchpand and keyboard to integrate fully and play proper.

I would like to kill people at Apple for making it hell to try to get voice recordings off my Iphone onto a real machine enslaved to Itunes. 'Die Jobs!', whooops.
(I spend hours in a vacant room recording myself giving imaginary speaches to parliament into the Iphone then try to get it to Itunes on a real machine stuffed!)

I hate fricken Itunes it is the most f@cked up peace of 'control over owner' crap ever overcomplicated name protocol time waisting computer hoging crap ever.  Stick ya f@cking play lists up ya fking ars etc. It does not even integrate with it's own 'all Apple' products.
Songs on the Ipod (which I also have) and IPhone are equaly caged in when originating from me Iphone.  
It's way too hurdly to hack around all the time along with all the other apps and so on on em.

Real life, hence, is on my beautiful Dells which I can destroy and restore in half an hour and do what ever I want, without Apple caging everything up and wiping you out if you synchronise from one to the other in the way it does not deem according to its **** hole protocol etc.

Despite the above, I did just get a quote on going all Apple, way too overpriced. Apple will also not run some super cool PC Aps that I use.
Won't let them get away with charging what they try to. and cannot stand being owned by those you have already paid out!
And those new Imacs with that miniscule hard drive space for a fortune is total stand up and urinate on it territory for me.

By the way the moment Apple started to be a follower rather than a leader when it came out with the 7" Ipad is the day it died, just after the glorious leader coincidentally.  

Apple had an inspired resurrection on the back of the Ipod (That teen music button really is where the market is, it seems, doesn't mean Beaver can creat a good song however) Apple cleverly morphed that Pod, into the Iphone, Ipad and are now tryng to intergrate the whole on the the cloud and real machines.

It was mistifying whatching all that media hype just imediatly calling smart phones, Iphones and so everyone seemed to lose sight of the fact that there were smart phones before Iphones and alternatives,  Ya just had to have one to feel you were groovy!  Dumbest thing the media ever did.  All that lost advertising dollars they just gave to Apple, even the fricken news tells us when a new Apple crap pad is out.  Are you fricken kidding me? How stupid are they? Apple couldn't lose? And all the tv channels went broke!  How dumb.  

My God look at that share price how the hell do they do it?

But lose? Apple will now!

JB? I don't know - Make grandmas house rock with a simple I-intergrated device!? That fixes all the above.
I'm too old for this crap like 4 billion others.


----------



## burglar

notting said:


> ... I'm too old for this crap like 4 billion others.




This is the first time I have heard an anti Apple rant.
Frankly, you make it sound believable!


----------



## McLovin

burglar said:


> This is the first time I have heard an anti Apple rant.
> Frankly, you make it sound believable!




There's another forum I regularly partake in (travel related) and they have a thread there with the title "Anyone else hate Apple" and it has 3,747 posts.

I have an iPhone and an iPad. I bought one got the other one for free. I use my iPhone because it's my phone, I'd be just as happy with a BBerry, infact I'll probably go back to one. Haven't used my iPad in months, it does nothing my IBM doesn't and the IBM has a keyboard. Like 90% of people, I use computers to surf the net and run basic apps. I don't need something that looks like, and costs like, Phillipe Starke designed it.


----------



## So_Cynical

ROE said:


> Notting have you seriously use any of the Apple product?
> 
> you can get an iPhone, iPad, Macbook, iMac, Apple TV, iPod
> every single of them works extremely well with one another ... seamless
> integration with a few touch




Seamlessly with each other...in near complete ignorance of the rest of the world.

As is the Apple (jobs) way...did you guys read the book?


----------



## prawn_86

So_Cynical said:


> Seamlessly with each other...in near complete ignorance of the rest of the world.
> 
> As is the Apple (jobs) way...did you guys read the book?




I have always said Apple are average products, amazingly marketed. Apple is a marketing company, not an IT company.

The fact that you can't just plug and play into any PC or USB etc means i will never buy one


----------



## frankie_boy

prawn_86 said:


> I have always said Apple are average products, amazingly marketed. Apple is a marketing company, not an IT company.
> 
> The fact that you can't just plug and play into any PC or USB etc means i will never buy one






hahahaha... sooo not coming into this argument.. 

*walks away, hand in the air..


----------



## McLovin

prawn_86 said:


> I have always said Apple are average products, amazingly marketed. Apple is a marketing company, not an IT company.
> 
> The fact that you can't just plug and play into any PC or USB etc means i will never buy one




I disagree, I think Apple are amazing products. They just do way more than the average person needs, but they buy them because, like you say, they are extremely well marketed. How else do you explain people queueing for days to buy a product whose supply is virtually unlimited.


----------



## matty77

I have both apple products (Iphone, Ipad etc) and also wife has the latest Samsung Galaxy, different lap top etc, so we are a fair mix.

One thing I can say without a doubt is your statement below is just plain wrong. Apple products actually do way less than the average person needs, they are actually designed so that any one with half intelligence can turn one on and use it straight away - they are designed for dummies. Which is fine, I dont have an issue with it, but if you want true techno stuff then you need to look elsewhere as apple doesnt have it - sorry but its true. The latest Galaxy 3 is far superior than any Iphone - miles in front. But apple users like to have little options and everything thought out for them, I use both so I should know.

They are just marketing gurus but people are starting to wake up since the last update.....




McLovin said:


> I disagree, I think Apple are amazing products. They just do way more than the average person needs, but they buy them because, like you say, they are extremely well marketed. How else do you explain people queueing for days to buy a product whose supply is virtually unlimited.


----------



## McLovin

matty77 said:


> I have both apple products (Iphone, Ipad etc) and also wife has the latest Samsung Galaxy, different lap top etc, so we are a fair mix.
> 
> One thing I can say without a doubt is your statement below is just plain wrong. Apple products actually do way less than the average person needs, they are actually designed so that any one with half intelligence can turn one on and use it straight away - they are designed for dummies. Which is fine, I dont have an issue with it, but if you want true techno stuff then you need to look elsewhere as apple doesnt have it - sorry but its true. The latest Galaxy 3 is far superior than any Iphone - miles in front. But apple users like to have little options and everything thought out for them, I use both so I should know.
> 
> They are just marketing gurus but people are starting to wake up since the last update.....




Most people don't want techno stuff, they want something that is easy to use and looks "cool". Having everything made easy so the user doesn't have to think is, for many people, a fantastic product. We are after all talking about a phone, not a space ship. I have heaps of friends with iPhones who don't even know how to use apps, these aren't old fogies they're people in their 20s-30s. And they wouldn't even be aware that you can sync across devices. They have an iPhone for no other reason than everyone else does. What Apple has managed to do in a phone is incredible, as are Samsung etc. They have managed to convince people they need to pay for something that is far beyond what they actually need.

I use my phone to:

- Make calls
- Send texts
- Take photos
- Send emails

I got an iPhone because it came on contract so I paid nothing, when the contract expires I'll probably be going back to BBerry.


----------



## notting

McLovin said:


> Most people don't want techno stuff, they want something that is easy to use and looks "cool".




Guess there is no hope for JB then.



McLovin said:


> They have an iPhone for no other reason than everyone else does. They have managed to convince people they need to pay for something that is far beyond what they actually need.




And less hope for the human race.


----------



## McLovin

notting said:


> Guess there is no hope for JB then.




Why not? I don't mean techno as in technology, I mean they don't want to have to think, it should just work.


----------



## notting

McLovin said:


> Why not? I don't mean techno as in technology, I mean they don't want to have to think, it should just work.




Just aluding back to my original inference that they need to creat a new service or something that you can't just sell on the net.  If overpriced simple to use all synced things can be packed up and sold off the net, then 'JB you've got nothing to sell?'  Still if apple is supposed to be all that, there shops are rediculously busy compaired to all the othes along the walk.


----------



## Smurf1976

McLovin said:


> Why not? I don't mean techno as in technology, I mean they don't want to have to think, it should just work.



In 1980 people who had computers at home had them in order to tinker, play games and other wise "compute".

Most people who have computers in 2012, and that is now most people, have zero interest in how it works. They just want to send emails, surf the internet or whatever without knowing anything technical. 

So I'd agree with the Apple "keep it simple" concept but for one point. History has shown that those who seek to lock consumers into a proprietary format end up losing. Remember Beta Vs VHS? That was essentially the same. Anyone remember 3" (as distinct from 3.5") disks? Or any of those other "locked in" things that tech companies (especially Sony with their numerous attempts) have tried and failed?

Long term, Apple will be using the same software etc as their rivals. The only question being whether they let rivals go the Apple way, or whether they wait for rivals to take their business and Apple ends up using Android, Windows or whatever. A bit like how Sony ended up manufacturing VHS machines once the war was over....


----------



## McCoy Pauley

I'm a bit late to the Apple/Android/Windows battle, but here is my  worth.

My wife has an iPad (new version) which she loves and is never without.  She is a stay-at-home mother, so she doesn't need it for work or anything like that.  Mostly used for browsing and email, and it does the job perfectly well.  We also have it loaded with some educational apps for the children to play with when they earn the right to use the iPad.

My wife also has a Nokia Windows phone, recently purchased.  A big upgrade on the HTC she used to use, which threw in the towel less than 18 months after we purchased it (and my wife isn't a big mobile phone user).

I have an iPhone through work, which is good, although I note that its 3G, even on Telstra, is probably less than I hoped for.

I purchased an ASUS Nexus 7 by Google when Dick Smith was heavily discounting it in anticipation of the new generation of Nexus 7s a few weeks ago.  I find it much better than an iPad and the iPad mini which Apple released doesn't have enough features, IMO, to justify the higher price tag compared to the Nexus 7.

I'm also interested to see how Microsoft perform with the Surface and, especially the Surface Pro, which is the first real attempt of marrying the laptop with a tablet computer (I believe you have MS Office fully integrated into the tablet).

Back on the thread topic, I've been to JBH a few times to see if they had some electronics.  I purchased my wife's Nokia Windows phone from JBH and found the sales staff to be reasonably helpful, though I had done all my research online before going into the store, so it was pretty much just a visit to consummate the transaction.  The next time was to purchase my Nexus 7, as but the JBH store I visited had sold out, I wanted it straightaway, so I went to Dick Smith to buy it there instead.

IMO, without looking too closely at the fundamentals, I think JBH's future earnings growth is limited to opening new stores in new residential developments and the like.  I don't see much growth out of existing stores beyond the rate of CPI.


----------



## mr. jeff

I agree
they are like a more modern version of Harvey Norman - won't make opportunity from the changed market, just happy to whinge about tight customers. Don't know whether the staff have dropped in usefulness, but it seems that way. I have not spoken to a person who was excited with the service and knowledge they offer. Having said that, they have the advantage of at least being stuck in the naughties, HVN is stuck in the 90's!

Among their many problems is that their customers know when they are being taken for a ride, and that stops the "feel good" experience of going there with friends for a look and a browse. 
I would still short HVN before JBH, but wouldn't hesitate taking the axe to both really!

(For that matter, AXE is looking attractive with all that cash.)


----------



## skc

JB announced that they will go into white goods and appliances.

Market says "think harder"!

-6% :bad:


----------



## McLovin

skc said:


> JB announced that they will go into white goods and appliances.
> 
> Market says "think harder"!
> 
> -6% :bad:




It's sort of an admission that they've maxed out their growth in Hi-Fi.

Price deflation time in whitegoods?


----------



## notting

Jerry Harvey will be doing cartwheels!


----------



## matty77

Oh this will be fun to watch.

Poor Gerry..

While I doubt it will improve anything for JB it will certainly be another nail in the coffin for Gerry no doubt he will be up in arms and be in the media saying how bad this will be for the industry!

"We dont need more competition, we need my share price to go up. Oh did I tell you I dont care about our share price - p.s. Down with online sales"


----------



## jank

matty77 said:


> Oh this will be fun to watch.
> 
> Poor Gerry..
> 
> While I doubt it will improve anything for JB it will certainly be another nail in the coffin for Gerry no doubt he will be up in arms and be in the media saying how bad this will be for the industry!
> 
> "We dont need more competition, we need my share price to go up. Oh did I tell you I dont care about our share price - p.s. Down with online sales"




Never a truer word spoken!


----------



## clinta44

The Market has gone crazy today! The media is going on about what a great result JB Hi Fi posted today! 

In my opinion, the result was Pathetic, (the key measure for retailers) same store sales are down 3.5% on the back of an already bad previous period! 

Then the SP is up 15% - pure madness.


----------



## skc

clinta44 said:


> The Market has gone crazy today! The media is going on about what a great result JB Hi Fi posted today!
> 
> In my opinion, the result was Pathetic, (the key measure for retailers) same store sales are down 3.5% on the back of an already bad previous period!
> 
> Then the SP is up 15% - pure madness.




Jan comp sales were up a good amount. Market's saying that all the rate cuts have finally start to filter thru, and margin improvement will continue with less cut throat discounting.

But most importantly, JBH is THE most shorted stock on ASX and an inline results would see a lot of short covering... a dividend of 50c makes the short every expensive to hold (along with the high borrow costs).

You are seeing the same thing in MYR, DJS and HVN today, and will see the same market reaction if they report inline results imho.

It is pure madeness that I thought about all this and didn't buy on open today...


----------



## clinta44

skc said:


> It is pure madeness that I thought about all this and didn't buy on open today...




Then it would have tanked!


----------



## CanOz

skc said:


> Jan comp sales were up a good amount. Market's saying that all the rate cuts have finally start to filter thru, and margin improvement will continue with less cut throat discounting.
> 
> But most importantly, JBH is THE most shorted stock on ASX and an inline results would see a lot of short covering... a dividend of 50c makes the short every expensive to hold (along with the high borrow costs).
> 
> You are seeing the same thing in MYR, DJS and HVN today, and will see the same market reaction if they report inline results imho.
> 
> It is pure madeness that I thought about all this and didn't buy on open today...




If anyone ever wanted to know how to play the short squeeze, this is it!

CanOz


----------



## skc

CanOz said:


> If anyone ever wanted to know how to play the short squeeze, this is it!
> 
> CanOz




FLT is also a good candidate. I'd watch the results and dividends closely...


----------



## Sir Osisofliver

I did flag this as a short squeeze with some potential a while ago. Go see the newbie thread. It's a few pages back.


----------



## inyaface

Why is this stock still climbing like there is no end to their growth. Surely with their EPS, this must be a bubble waiting to burst. well not burst....deflate a bit.


----------



## matty77

Went to a store today.

15 staff standing around doing nothing, some playing drums and guitar in music section. In TV section about 5 staff watching a movie being streamed off a I-phone.

No idea how they can afford so many wages..

2 Customers in the whole store


----------



## skc

matty77 said:


> Went to a store today.
> 
> 15 staff standing around doing nothing, some playing drums and guitar in music section. In TV section about 5 staff watching a movie being streamed off a I-phone.
> 
> No idea how they can afford so many wages..
> 
> 2 Customers in the whole store




It is a Tuesday morning so that might explain the lack of customers? Doesn't explain the staffing level though...


----------



## Klogg

skc said:


> It is a Tuesday morning so that might explain the lack of customers? Doesn't explain the staffing level though...




Depends... If I go to the store in Melb CBD before 11:30, it's usually empty. Between 12 and 2:30 it goes nuts.

It could be they were preparing for the rush.


----------



## G Gekko

Taking a look at JBH, it seems like a great business to get into. Strong fundamentals and well positioned to do very well as the economy picks up again. Just can't help but feel that it's a little overpriced? Would it be that due to the strong brand that everyone is expecting it to perform well?


----------



## VSntchr

G Gekko said:


> Taking a look at JBH, it seems like a great business to get into. Strong fundamentals and well positioned to do very well as the economy picks up again. Just can't help but feel that it's a little overpriced? Would it be that due to the strong brand that everyone is expecting it to perform well?




If you want to invest based on fundamentals and growth prospects then you need to have at least a basic understanding of valuation.
By having a way to value a company you can then make your own decision about how the market is pricing the company and if it agrees with your perceptions with regard to growth.

Only a few months ago JBH was being looked at very negatively and nobody wanted it. Now its back in fashion and the price is up ~70% from its lows...
Has the business changed in VALUE by ~70% in that time? The answer is clearly no, so your correct in assuming that pricing reflects what peoples perceptions are about the company.

By having your own valuation of the company you can take advantage of the wild swings in perceptions that take over prices from time to time. However, if you take this approach you must have a deep understanding of the company and be confident of your assumptions and beliefs...otherwise - when the market offers you the best opportunities (i.e. perhaps JBH a few months back)...you will be unwilling to take the plunge!


----------



## G Gekko

Thanks VSntchr. You're absolutely right.


----------



## sammy84

Can anyone explain today's drop?
XAO is up along with other retailers. I can't seem to find any news out there which may have caused it. 
It's a light volume down move so far.


----------



## McLovin

Valued said:
			
		

> I haven't gone to a JB Home store yet. Are they trying to be Harvey Norman but instead of rip off prices and hand holding, they have cheaper prices but poor customer service?




Answering here as it's more related to JBH...

Here's pricing indexes for a few of the major electronic (first chart) and whitegoods retailers (second chart). It bounces around a fair bit, but yes they are generally in the mid/lower price range.


----------



## VSntchr

Well McLovin, here is the breakdown you were after and it looks like you were correct in your suspicions.

Australia 
 Total sales grew by 6.5% to $1.84b, with comparable sales up 
2.3%. 
* The newly converted HOME stores1 achieved comparable sales 
growth of 13.6% in HY14 post conversion. *
 Hardware2 sales in HY14 were up 11.0%, with comparable sales 
up 6.6% driven by growth across the majority of categories 
including Visual. 
 Software sales (Music, Movies and Games) in HY14 were 
negative 7.9% and on a comparable basis were negative 11.3% 
(HY13: -10.8%).


----------



## pixel

Holding the (yellow) 1-year EMA would be a good start.
However, for me to become interested in an entry, $18.80 would need to become support. So far, no go.


----------



## VSntchr

With regard to JBH's EBIT margins - does anyone have a good idea of why the HY is usually ahead of the FY margin?

For example FY13 was ~5% while both HY13 HY14 were both ~6.8%.

Random thoughts are:
- It is related to the holiday period where JBH has increased turnover and can push suppliers even further? 
- Or is it that in the non-holiday period that they are forced to discount prices further in order to keep volumes moving?
- Or is it a reflection of the product mix that is sold during the holiday period which are higher margin products?
- Something completely obvious that I am missing????


----------



## skc

VSntchr said:


> With regard to JBH's EBIT margins - does anyone have a good idea of why the HY is usually ahead of the FY margin?
> 
> For example FY13 was ~5% while both HY13 HY14 were both ~6.8%.
> 
> Random thoughts are:
> - It is related to the holiday period where JBH has increased turnover and can push suppliers even further?
> - Or is it that in the non-holiday period that they are forced to discount prices further in order to keep volumes moving?
> - Or is it a reflection of the product mix that is sold during the holiday period which are higher margin products?
> - Something completely obvious that I am missing????




All due to higher turnover during the holidays. It's just operational leverage - sales increases while fixed costs stay the same.


----------



## VSntchr

skc said:


> All due to higher turnover during the holidays. It's just operational leverage - sales increases while fixed costs stay the same.




Got it, cheers.


----------



## McLovin

How does JBH replace that cheap foot traffic they used to get in the door for music, movies and games? No one is saying "Hey, Joe, let's go check out that new Westinghouse side-by-side". That, IMO, was their big advantage over everyone else, and it will be hard to replace. That's probably why the comparisons to Best Buy keep being made.

The move into whitegoods seems to be acceptance that while less profitable, it is far more insulated from the internet than their traditional lines.


----------



## notting

That's the ball game.
The heat is where the teens are.
It was the Ipod that revolutionized and made Apple, Jobs was very smart to morph it into the Iphone, then the peace of crap that is the Ipad.
JB tried with it's streaming now it's going for Edna Everage with it's washing machines. Hasn't done much for Woolies yet. JB your back in the pen.


----------



## McCoy Pauley

Full year results out this morning. I haven't perused them as yet (been busy with my day job) but the market seems disappointed - the stock has been dumped to the tune of an almost 8% decline in the first half hour of trade.

Not sure whether that represents a good entry point until I get the chance to go through the results.

I hold, so DYOR.


----------



## Junior

Hmmm met guidance and market expectations, yet down 8%.

Does this result mark the transition of JB from a 'growth' stock to an 'income' stock?  They expect to only open 8 new stores in the coming year and are focussing on their 'JB Home' stores... I guess this is a whitegoods type setup, based on what I saw in their Brighton (VIC) outlet recently.


----------



## Junior

Morgan Stanley says:



> FY14 result at upper end of guidance range: JBH
> reported FY14 NPAT of A$128.4m, at the upper end of
> guidance for A$126-129m. We believe this is a
> commendable result given weak industry-wide trading
> during 4Q.
> 
> Outlook statement disappoints: JBH has guided to
> FY15 sales of A$3.6bn (consensus A$3.7bn, MS
> A$3.75bn) based on weak expected tablet sales. We
> believe the guidance is conservative and reflects the
> weak start to FY15 trading through July.
> 
> FY15 trading YTD: July trading performance appears
> weak (sales growth -3.2%, LFL -5.5%) based on weak
> tablet sales. Encouragingly, gross margins are above
> pcp levels which implies that consensus earnings
> downgrades should be limited.
> 
> Capital management initiatives positive: JBH has a
> permanent lift to its dividend payout ratio from 60% to
> 65% (MS 70%, Consensus 60%). Further, JBH will
> continue to buy back shares to offset dilution from the
> share option plan.


----------



## McCoy Pauley

Yep, I think Morgan Stanley nailed it.  A very good 2013/2014 result based on my read-through this morning but the outlook looks soft - a combination of a poor set of July sales figures and concern over the ongoing transition into the JB HOME channel.

Interesting to read that online sales growth in the 2013/2014 year continued, now making up 2.2% of the group's revenue, compared to 2.0% the previous year.  Hopefully JB Hi-Fi can continue to build that part of its business.


----------



## db94

Everyone was expecting their results to meet the forecasts. Classic example of buy the rumor, sell the news. Huge funds will/have dumped their stocks on those who invest based on the news, forcing the price down and then they can buy it back at a bargain later. Wait for the shorts to dry up and then look to enter. Watch the gap close. This is all IMO though


----------



## skc

The Fy profit guidance was last reaffirmed on 19 Jun, so it'd be really surprising if they didn't meet it.

Today's fall is all about the weak July LFL update... I really don't know how much that 9 weekend days vs 10 weekend days mattered. If they think that was the contributing factor they'd quantify it more clearly in the "Trading Outlook" sector. The FY15 revenue of $3.6B is also on the light side of analyst forecasts. At this lower revenue, they'd have to increase profit margin to meet the market's EPS expectations.

It's also interesting to note that most of the growth will supposedly coming from HOME... which probably makes increasing margin even more challenging. 

The chart is looking interesting. It's sitting at a pretty important level. Will it hold this time?


----------



## galumay

db94 said:


> Everyone was expecting their results to meet the forecasts. Classic example of buy the rumor, sell the news. Huge funds will/have dumped their stocks on those who invest based on the news, forcing the price down and then they can buy it back at a bargain later. Wait for the shorts to dry up and then look to enter. Watch the gap close. This is all IMO though




I must be having a blonde moment, but you say, _"Classic example of buy the rumor, sell the news." _which I take to mean the average punter bought on the rumour and are now selling on the news, then you go on to say, _"Huge funds will/have dumped their stocks on those who invest based on the news, forcing the price down and then they can buy it back at a bargain later"_ - which leads me to question who exactly is buying on the news?? Secondly if its the huge funds that have dumped their stock then how can they buy it at a bargain later? Havent they sold at a bargain price?

Seems more likely to me that its simply a case of due to the news, buyers have dried up at the current price and sellers are selling at lower prices out of fear of a further dropping price.


----------



## notting

Hard to increase margins when competing with Woolies, internet, Dick in ear (I mean Dick Smith float) and a weakening Ausi $.
But still  as gooda chance as any brick an mortar store and I bought a washing machine off the net a few years back, I won't be doing that again!


----------



## McCoy Pauley

I'm not a technical trader, but it looks to me that JBH has either just or is poised to break down through support based on yesterday's price action.


----------



## sammy84

Need to look at my charts tonight but should be some bullish divergence developing soon. Would need to see a strong close to be interested though.


----------



## TPI

I think the market reaction to JBH's results is an overreaction.

Tablet sales declines are not exclusive to JBH.

And product innovation occurs in cycles, this is given.

i-Pad Air 2 (10") is coming soon and next year maybe a 12" i-Pad Pro (think i-Pad/notebook hybrid)...

i-Phone 6 is also coming soon with big Samsung-sized screens...

i-Watch thingy is also coming soon...

And in time other products will also be developed that we didn't know we needed.

And, Apple share price just hit $100 this week:

http://www.smh.com.au/business/reta...imism-about-new-products-20140820-1063g7.html

JBH's diversification into home appliances also makes sense to me, all these products are getting more techy and connected these days.

I also don't think any other retail discretionary stock has done as well as JBH in terms of rewarding shareholders with dividends, having increased 1200% from 7cps in 2004 to 84cps in 2014 (and only decreasing once in 2012).

Sure there will be competition from DSH and other online channels, but I think JBH has the runs on the board to deal with these competitive threats.

I think the average person will still generally prefer to purchase from a known and trusted brand and with the option to try before you buy at a retail storefront, rather than through eBay or other online only sites.


----------



## TPI

Interesting article below with stats:

http://m.idc.com//pressRelease/prUS24890514

Note commentary quoted below about bigger-sized smartphones and larger devices like Microsoft Surface Pro 3 (Microsoft's 12" tablet/notebook hybrid currently in the market, with Apple's version not made/released yet):
_
"In the past year alone, the phablet share of smartphone shipments has more than doubled, from 4.3% in the first quarter of 2013 to 10.5% in the first quarter of this year, representing 30.1 million units shipped. As large phones clearly impact near-term tablet growth, IDC expects the market to rebound by shifting its focus back toward larger-screened devices. Products with larger screens--like Microsoft's new 2-in-1, the 12-inch Surface Pro 3— are expected to play a greater role in the market going forward.
"The shift back toward larger screens will mark a welcome sea change for most vendors as the average selling price for these devices will remain roughly 50 percent higher than the average sub-8-inch device," said Jitesh Ubrani, Research Analyst, Worldwide Quarterly Tablet Tracker. "Microsoft is also expected to benefit from this shift as the share for Windows-based devices is expected to double between now and 2018."_


----------



## TPI

Just thinking out loud, JBH effectively gives you exposure to the retail sector, technology sector, housing sector (via JB Hi-Fi Home), and also commercial/business 2 business sector (via JB Hi-Fi Commercial).

Disclosure: Long JBH so all commentary may be wishful thinking!


----------



## Garrett

Will be interesting to see how the Home stores go.

Some of the pimpled face teenagers who bought CD's, gadgets and computer games over the last decade are now first home buyers and will need appliances.


----------



## TPI

Garrett said:


> Will be interesting to see how the Home stores go.
> 
> Some of the pimpled face teenagers who bought CD's, gadgets and computer games over the last decade are now first home buyers and will need appliances.




That's true.

Also looking back at popular products of the past, eg. the hi-fi, stereo, video recorder, walkman, discman, DVD-burner, i-Pod, sat nav etc., the current generation of young kids may not even know what these are.

Technology is always changing and the company that can continue to maintain good EPS and DPS growth in the face of this by moving to newer and evolving product lines is doing well.


----------



## tech/a

> Disclosure: Long JBH so all commentary may be wishful thinking




Long since?

How long will you remain long?


----------



## TPI

tech/a said:


> Long since?
> 
> How long will you remain long?




Not that long in the end, down 10% is enough for me - time to cut losses and lesson learned!

I've had to re-assess my original premise for investing and whether it really stacks up.

I think I under-estimated the online price differential without being fully aware of who the other online-only threats may be.

For an i-Pad Air 32GB see the price comparison below:

JBH - $698 (in-store pickup only)
Yatango - $630+delivery fee (not sure exact amount, delivery only)
DSH - $623 (delivery and in-store pickup)
Kogan - 613 (delivery only)

The JBH price proposition doesn't seem to stack up and they don't offer delivery either.

Though JBH does offer a voucher to go with this sale of up to 25% off up to a $200 spend on certain items.

Maybe they were a price leader in the past, but not so anymore.

New technology product pipeline may help sales but won't change the competitive threats.

Hard to say whether the home appliances and commercial business will really do well enough to offset weaker performance here.


----------



## VSntchr

TPI said:


> Not that long in the end, down 10% is enough for me - time to cut losses and lesson learned!
> 
> I've had to re-assess my original premise for investing and whether it really stacks up.
> 
> Hard to say whether the home appliances and commercial business will really do well enough to offset weaker performance here.




Is JB Hi Fi scrapped from your investment list now? Or at what price will you revisit? 

Good job on being decisive, hopefully you made the right choice


----------



## TPI

VSntchr said:


> Is JB Hi Fi scrapped from your investment list now? Or at what price will you revisit?
> 
> Good job on being decisive, hopefully you made the right choice




Hi VSntchr,

It's not completely off the list as such, I'll still be monitoring it over the next couple of reporting periods.
I haven't got a firm price at which to revisit it yet as it depends more on some qualitative factors. 

If JBH can lower prices and be a genuine price leader and also offer timely delivery on more products then I think they would be more attractive.
Their cost of doing business (CODB) is 15% vs 19% for DSH, so there must be some more room to do this, though I don't know what this figure would be for online-only retailers.

Having an online site and not offering delivery on all products doesn't make sense to me.
DSH offers 3-5 days delivery on the products I checked.
Yatango I'm not sure about as you had to register and get to checkout before seeing this?!
And for Kogan on the i-Pad it said "leaves warehouse in 1-2 weeks" - so online-only, though cheaper is still not yet at an optimal service from this brief sample size.

I think Amazon in the US does free delivery within 1-2 days from what I read, and with low prices on products too.

Also I think the online-only retailers are not necessarily disadvantaged with a lack of store presence as there is nothing stopping someone from going into JBH or DSH and checking out products, then going online and purchasing at Kogan for cheaper.

I think JBH is still a quality business, it is just a matter of how they negotiate headwinds with increased competition locally and which may also come from outside Australia.

On balance I felt that there were probably lower risk and better return alternatives for my capital than holding on to JBH at present given the recent selling pressure and headwinds.


----------



## goccipgp

JBH seems to have support at 16.48 and upside resistance at 18.686. It has an ongoing P/E of 13.80, which indicates that it is undervalued. Technical buying signal at au stoxline.


----------



## galumay

goccipgp said:


> JBH seems to have support at 16.48 and upside resistance at 18.686. It has an ongoing P/E of 13.80, which indicates that it is undervalued. Technical buying signal at au stoxline.




P/E is not a reliable indicator of value.

As I have noted before, not quite sure why you post the buy/sell signals of a commercial service like stoxline, it looks spammy to be honest and its difficult to see how it adds any value to the thread.


----------



## Porper

galumay said:


> P/E is not a reliable indicator of value.
> 
> As I have noted before, not quite sure why you post the buy/sell signals of a commercial service like stoxline, it looks spammy to be honest and its difficult to see how it adds any value to the thread.




If you aren't affiliated to that company I doubt they'd want you giving their buy/sell signals.

However, looking at the chart it's difficult to see how they are bullish.

1. Support has given way meaning there is now resistance just above current levels.
2. Volume has increased during the latest sell-off.
3. Next zone of support $16.00 - $15.50.

Also, their products look outdated...they need to appeal to the younger generation i.m.o. Sales are also under pressure. All in all not a lot to be bullish about. A great contrarian indicator though!!


----------



## hiddencow

I'm in!
Technical gurus will probably tell me I'm being foolish but couldn't resist at current prices.

I see JBH is the leading electronics retailer in the country. Their fortunes will be dependent on new products and demand and the overall economy affecting people's discretionary income. I don't see Australians not spending any money on electronics anymore.

I'm hopefuly of growth in the medium to long term. In the meantime happy to collect my over 5% fully franked dividend.


----------



## tech/a

hiddencow said:


> I'm in!
> Technical gurus will probably tell me I'm being foolish but couldn't resist at current prices.
> 
> I see JBH is the leading electronics retailer in the country. Their fortunes will be dependent on new products and demand and the overall economy affecting people's discretionary income. I don't see Australians not spending any money on electronics anymore.
> 
> I'm hopefuly of growth in the medium to long term. In the meantime happy to collect my over 5% fully franked dividend.




Your being foolish


----------



## Boggo

tech/a said:


> Your being foolish




Maybe not tech/a.
That dividend yield is going to jump all the way to 6% if the stock goes down to $14, you're doing it all wrong


----------



## McLovin

Boggo said:


> Maybe not tech/a.
> That dividend yield is going to jump all the way to 6% if the stock goes down to $14, you're doing it all wrong




And Joe wonders why newbies don't bother with this forum.


----------



## tech/a

McLovin said:


> And Joe wonders why newbies don't bother with this forum.




Oh where's your sense of humour!


----------



## hiddencow

tech/a said:


> Your being foolish




*You're

That's all I got


----------



## Joe Blow

I'm all for a sense of humour and lightening the mood... but it would be nice to see some serious analysis and discussion too. 

Can't we have both?


----------



## tech/a

hiddencow said:


> I'm in!
> *Technical gurus will probably tell me I'm being foolish *but couldn't resist at current prices.
> 
> I see JBH is the leading electronics retailer in the country. Their fortunes will be dependent on new products and demand and the overall economy affecting people's discretionary income. I don't see Australians not spending any money on electronics anymore.
> 
> I'm hopefuly of growth in the medium to long term. In the meantime happy to collect my over 5% fully franked dividend.




Such a serious mob here.
I was simply complying.


----------



## McLovin

tech/a said:


> Such a serious mob here.
> I was simply complying.




My comment wasn't directed at your post.


----------



## Boggo

Joe Blow said:


> I'm all for a sense of humour and lightening the mood... but it would be nice to see some serious analysis and discussion too.
> 
> Can't we have both?




Actually the serious bit is the fact that the yield percentage figure is very misleading and will continue to rise in a falling stock, that was the probably not so subtle message in my post.
It is a point that some of our more learned readers would pick up on, others obviously may see the post as something closer to their level of understanding and would instantly respond accordingly.

Bottom line, buying a falling stock because the dividend yield is high is an expensive way of getting franking credits.


----------



## McLovin

Boggo said:


> Bottom line, buying a falling stock because the dividend yield is high is an expensive way of getting franking credits.




Except, bottom line, hiddencow never said he was buying because of the dividend. He gave a paragraph explaining his reasoning: That JBH was a largest electronics retailer, that people will continue to buy electronics and that he thinks there will be medium and long term growth. He added the final caveat that until the market turns he's happy to collect the dividend. You've described your response perfectly.



Boggo said:


> It is a point that some of our more learned readers would pick up on, others obviously may see the post as something closer to their level of understanding and would instantly respond accordingly.


----------



## hiddencow

And I would argue buying a stock that has fallen is a good thing because you get a higher yield. It's only where that yield is not sustainable that it is bad. What the price will do in the future I have no idea. I do think the profits and cash flows will be good though and that is why I have bought.
I wasn't trying to start another technical vs fundamental analysis debate, I don't really care.
My comment was just acknowledging that my purchase was probably against technical principles, not trying to offend any ppl on here.


----------



## VSntchr

hiddencow said:


> My comment was just acknowledging that my purchase was probably against technical principles.




Well, JBH is *perhaps* a buy if your using a short term bollinger band strategy


----------



## tech/a

hiddencow said:


> And I would argue buying a stock that has fallen is a good thing because you get a higher yield. It's only where that yield is not sustainable that it is bad. What the price will do in the future I have no idea. I do think the profits and cash flows will be good though and that is why I have bought.
> I wasn't trying to start another technical vs fundamental analysis debate, I don't really care.
> My comment was just acknowledging that my purchase was probably against technical principles, not trying to offend any ppl on here.




No offence--I find fudies easier to upset than techies---
I cant see how you can justify buying a falling stock with no knowledge as to wether it is going to continue.
If this falls to 12-10 or less how can you justify a buy at 16?



VSntchr said:


> Well, JBH is *perhaps* a buy if your using a short term bollinger band strategy




Why would you use a Bollinger strategy its simply a displaced 20 period M/A
Reflecting past.


----------



## Boggo

hiddencow said:


> I wasn't trying to start another technical vs fundamental analysis debate, I don't really care.
> My comment was just acknowledging that my purchase was probably against technical principles, not trying to offend any ppl on here.




I understood what you were saying hiddencow. I have seen a few on here quote high yields but when you look at what the stock has done then it is obvious why the yield is high.
I think the TLS actually got to around 9 or 10% at one point when it was falling.

If you can get a rising price and a company maintaining a constant yield then you have the best of both worlds.

Just as an aside, the JBH fundamentals could be another topic, their annual EPS % is at single digits for the first time in 10 years and their profit this year was less than it was in 2006.

Hope it does a run up for you, Cheers.


----------



## hiddencow

tech/a said:


> No offence--I find fudies easier to upset than techies---
> I cant see how you can justify buying a falling stock with no knowledge as to wether it is going to continue.
> If this falls to 12-10 or less how can you justify a buy at 16?
> 
> Why would you use a Bollinger strategy its simply a displaced 20 period M/A
> Reflecting past.




And if it raises to 20, how can I justify not buying at 16? If I knew it would fall to 10-12 then I would sell everything and short the crap out of it and reverse my position 180 degrees at the bottom. But sadly I don't. Like I said, I don't want to get into a debate. I know nothing about technical analysis and don't really care.



Boggo said:


> I understood what you were saying hiddencow. I have seen a few on here quote high yields but when you look at what the stock has done then it is obvious why the yield is high.
> I think the TLS actually got to around 9 or 10% at one point when it was falling.
> 
> If you can get a rising price and a company maintaining a constant yield then you have the best of both worlds.
> 
> Just as an aside, the JBH fundamentals could be another topic, their annual EPS % is at single digits for the first time in 10 years and their profit this year was less than it was in 2006.
> 
> Hope it does a run up for you, Cheers.




Telstra div yield got very closer to 11%. I bought in around 10.5%, wasn't too worried when it fell a little further and the yield went higher.

You must be looking at the wrong figures.
Profit in 2006 26.85m and EPS was 24.53
Profit in 2014 126.89m and EPS was 126.89


----------



## Boggo

My interest in JBH was that I held it my SMSF until early this year.

Below is the map of JBH that is my influence.


----------



## Boggo

hiddencow said:


> ...
> You must be looking at the wrong figures.
> Profit in 2006 26.85m and EPS was 24.53
> Profit in 2014 126.89m and EPS was 126.89




Trying to type too quickly between phone calls, that should have read 2011, not 2006 and the EPS is the EPS growth which is now single digits.


----------



## tech/a

Boggo said:


> My interest in JBH was that I held it my SMSF until early this year.
> 
> Below is the map of JBH that is my influence.






> I know nothing about technical analysis and don't really care.




Ok

ill just speak to myself then.
Clearly there are no areas of support on Boggos chart.
Lower highs and lower lows nothing remotely indicating a change in sentiment.

'Now I'm no Fundi but Id have thought a decline in the AUD would affect JBH buying power and as such its bottom line

This is looking pretty sick and to take a long now IS TECHNICALLY FOOLISH---in my not so humble opinion.


----------



## Julia

Boggo said:


> I have seen a few on here quote high yields but when you look at what the stock has done then it is obvious why the yield is high.
> I think the TLS actually got to around 9 or 10% at one point when it was falling.






tech/a said:


> Clearly there are no areas of support on Boggos chart.
> Lower highs and lower lows nothing remotely indicating a change in sentiment.




+1 to both Boggo's and Tech's remarks.

I've been influenced to buy partly for grossed up yield, but only when the stock has previously met my criteria  in other respects.
Will never buy a falling stock.  It still seems a popular thing to do, however.  Didn't work out so well with some now well known examples like ABC Learning et al.


----------



## McLovin

hiddencow said:


> And I would argue buying a stock that has fallen is a good thing because you get a higher yield. It's only where that yield is not sustainable that it is bad. What the price will do in the future I have no idea. I do think the profits and cash flows will be good though and that is why I have bought.




I've thought JBH has problems for years (I've said it several times in this thread). This is a company that made its fortune selling cd's and video games. Obviously that business is going to disappear. They also used to get the convenience factor with things like memory cards but they don't really anymore and margins in that business have compressed. The pricing difference was extortionate before the internet really took hold. The move in to whitegoods explains most of the GPM uplift. I think they get interesting below $10.


----------



## VSntchr

tech/a said:


> Why would you use a Bollinger strategy its simply a displaced 20 period M/A
> Reflecting past.




Why so serious!?

Was just adding to the humour which the techies so kindly started!


----------



## hiddencow

McLovin said:


> I've thought JBH has problems for years (I've said it several times in this thread). This is a company that made its fortune selling cd's and video games. Obviously that business is going to disappear. They also used to get the convenience factor with things like memory cards but they don't really anymore and margins in that business have compressed. The pricing difference was extortionate before the internet really took hold. The move in to whitegoods explains most of the GPM uplift. I think they get interesting below $10.




I agree that their cds, dvds and video games will continue to deminish. This next year will probably be somewhat offset from increased video game sales for PS4s and Xbox ones as more people get these consoles. Those are the games which will continue to sell while PC games will be pirated or purchased digitally. There is also a new nintendo 3DS console being released later this year. Music and movies though are probably doomed, hopefully this is the floorspace they are using to bring in their home products.

I think as long as people keep being attracted to the latest gadget, JBH will be in fine shape. There will be ups and downs though with release cycles. Population growth and the overall economy and levels of descretionary (although some people would put their phones ahead of food) income will have a big impact as well. Future technology advances and uptake by consumers is also important. For example 4k televisions and higher resolution media will have an impact if embraced by the consumer and whatever else apple decides to release. Apple super duper retina TV please.

In terms of competition, I think JBH will always have a strong position. Electronics while being more expensive in Australia than overseas, isn't double or triple the price like with clothes. When you add in the shipping costs, the slightly cheaper price is often outweight by being able to get it immediately and easier waranty claims. 

There are risks there but I like the prospects of this one in the future.


----------



## burglar

hiddencow said:


> ... There are risks there but I like the prospects of this one in the future.




Don't fall in love with your shares!
They are just 1's and 0's in someone's computer.

They don't love you back!!





Disclosure: I do not hold JBH long and never have!

 ... and I have never, ever shorted!


----------



## KnowThePast

Julia said:


> +1 to both Boggo's and Tech's remarks.
> 
> I've been influenced to buy partly for grossed up yield, but only when the stock has previously met my criteria  in other respects.
> Will never buy a falling stock.  It still seems a popular thing to do, however.  Didn't work out so well with some now well known examples like ABC Learning et al.




In defence of that...

JBH is current on PE of ~12 and P/Book of over 5. Not too expensive perhaps, but certainly not cheap.

There's a massive difference in buying a falling expensive share, and a falling cheap share.

There's also a massive difference in expecting to be right every time, versus a positive expectancy of a diversified group of stocks. 

Yes, ABC, Forge, etc are going to happen. But if you bought 50 falling stocks, at a PE, of say, less than 5, what do you think would be the likely outcome?


----------



## tech/a

KnowThePast said:


> In defence of that...
> 
> JBH is current on PE of ~12 and P/Book of over 5. Not too expensive perhaps, but certainly not cheap.
> 
> There's a massive difference in buying a falling expensive share, and a falling cheap share.
> 
> There's also a massive difference in expecting to be right every time, versus a positive expectancy of a diversified group of stocks.
> 
> Yes, ABC, Forge, etc are going to happen. But if you bought 50 falling stocks, at a PE, of say, less than 5, what do you think would be the likely outcome?




Don't know do you have figures?


----------



## KnowThePast

tech/a said:


> Don't know do you have figures?




I do, and they support what I've said. And it's not just me, there's been plenty of studies in various markets that observed the same.

What I was mainly getting at, is that it is wrong to say that it is always right/wrong to buy when the price is moving down/up. Context and other data are a lot more important. 

In fact, adding price action to any fundamental backtesting scenario usually makes little difference. That is, a low PE strategy tends to overperform the average - adding extra buy/sell triggers based on price action makes little difference. 

To be honest, I've never seen a convincing argumest for buying, or not, into a falling, or rising share price. Not one substantiated by data anyway.


----------



## galumay

KnowThePast said:


> I do, and they support what I've said. And it's not just me, there's been plenty of studies in various markets that observed the same.
> 
> What I was mainly getting at, is that it is wrong to say that it is always right/wrong to buy when the price is moving down/up. Context and other data are a lot more important.
> 
> ......




Agreed, some of my best buys have been in companies that are falling hard, thats part of the game for a contrarian, fundamental investor! 

Its about understanding why the market is pricing a share at a certain level and if its mis priced then taking the opportunity.

Mind you, JBH wouldnt be a company I would buy into currently!


----------



## tech/a

KnowThePast said:


> *I do,* and they support what I've said. And it's not just me, there's been plenty of studies in various markets that observed the same.
> 
> What I was mainly getting at, is that it is wrong to say that it is always right/wrong to buy when the price is moving down/up. Context and other data are a lot more important.
> 
> In fact, adding price action to any fundamental backtesting scenario usually makes little difference. That is, a low PE strategy tends to overperform the average - adding extra buy/sell triggers based on price action makes little difference.
> 
> *To be honest, I've never seen a convincing argumest for buying, or not, into a falling, or rising share price. Not one substantiated by data anyway*.




So you have or you haven't?

I have a lot of papers I keep on various academic trials
Few have any practical value to a trader as they are put together with academic logic---which the market tends to have a habit of smashing.

Fortunately I have my own academic and we are approaching many questions from a trading perspective academically----


----------



## galumay

tech/a said:


> Fortunately I have my own academic and we are approaching many questions from a trading perspective academically----




GOLD! I think this thread is developing some of the best of ACF's tongue in cheek, subtle humour!


----------



## KnowThePast

tech/a said:


> So you have or you haven't?
> 
> I have a lot of papers I keep on various academic trials
> Few have any practical value to a trader as they are put together with academic logic---which the market tends to have a habit of smashing.
> 
> Fortunately I have my own academic and we are approaching many questions from a trading perspective academically----




Here's what I get for ASX (partial) over the last 10 years:

Trades kept for 1 year. No dividends or interest on cash balances included. No averaging up or down.

Buy when PE < 5 and Current price 20% less than 1 month ago.
344.77%

Buy when PE > 12 and Current price 20% less than 1 month ago.
-18.04%

XAO
45.7%


What do you have?

DISCLAIMER: Lots of important detail omitted. Use at your own risk.


----------



## tech/a

KnowThePast said:


> Here's what I get for ASX (partial) over the last 10 years:
> 
> Trades kept for 1 year. No dividends or interest on cash balances included. No averaging up or down.
> 
> Buy when PE < 5 and Current price 20% less than 1 month ago.
> 344.77%
> 
> Buy when PE > 12 and Current price 20% less than 1 month ago.
> -18.04%
> 
> XAO
> 45.7% What do you have?
> 
> DISCLAIMER: Lots of important detail omitted. Use at your own risk.




WOW

How did you test this.
I'd like to see the figures 
Infact I'll pay for them 
If it was that easy every managed fund in the world would 
Be buying all stocks with a P/E under 5 that's pulled back 20% 
And holding for a year
Private mail me with details.


----------



## McLovin

galumay said:


> GOLD! I think this thread is developing some of the best of ACF's tongue in cheek, subtle humour!




That's one way of putting it!


----------



## skyQuake

tech/a said:


> WOW
> 
> How did you test this.
> I'd like to see the figures
> Infact I'll pay for them
> If it was that easy every managed fund in the world would
> Be buying all stocks with a P/E under 5 that's pulled back 20%
> And holding for a year
> Private mail me with details.




+1

Its kind of hard to test while being mindful of
-survivorship bias
-when do you rebalance?
-allocations/weightings?
-are you looking at asx200 or bigger universe
-liquidity


----------



## piggybank

It could finish the week sitting on the 50% Fib Btw, the black line is the 50 EWA.


----------



## KnowThePast

skyQuake said:


> +1
> 
> Its kind of hard to test while being mindful of
> -survivorship bias
> -when do you rebalance?
> -allocations/weightings?
> -are you looking at asx200 or bigger universe
> -liquidity




Hi skyQuake,

All excellent points, and there's a lot more to be wary of.

Survivorship bias - some of it is present in the results. Many bankrupt companies are included, however.

Rebalancing - for this test, no rebalancing. Bought whenever criteria is met, and held for a year. Rebalancing is the standard way most studies conduct these tests. But it doesn't resemble real life where things happen every day. One of the reasons why I developed my own system.

Weighting - in this test, 2% per stock.

Looking at entire ASX.

Liquidity - ignored for this test.

The total return is only a part of the story. Hit rate, risk, volatility, timing, portfolio management are just as, if not more important. There is, however, a limit on how much I am prepared to share on a public forum 

I wrote some thoughts about development of this kind of software in this thread:
https://www.aussiestockforums.com/forums/showthread.php?t=28370


Not sure which part of tech's post you added a "+1" to. Send me a private message if you are interested in more data.

KTP


----------



## TPI

From today's AFR, titled 'A worrying trend for JB Hi-Fi', which may explain the drop in price:

_"In consumer electronics, Dick Smith, which floated last December after being sold by Woolworths in 2012, seems to have taken online sales off its larger rival, JB Hi-Fi, in the past few months.

Traffic to JB Hi-Fi’s website rose 150 per cent to 100 million in 2014, but site visits so far this year have fallen 10 per cent, says the UBS analysis.

By contrast, Dick Smith’s site visits rose 80 per cent to 21 million last year and are up 65 per cent so far this year.

Mr Gilbert said Dick Smith’s gains appeared to have come almost exclusively from JB Hi-Fi.

“This is a worrying trend for JB Hi-Fi, particularly given the website is usually a good leading indicator for in-store sales,” he said."_


----------



## McLovin

hiddencow said:
			
		

> I think as long as people keep being attracted to the latest gadget, JBH will be in fine shape.




JBH didn't get to where it is just because of growing demand for electronic gadgets (although that provided plenty of wind in the sails). It was able to earn a return far above its cost of capital because its business model plugged into the market better than anyone else (it was really just a version of get em in with cheap crap and hope they buy something of higher value). What they've been doing for the last ten years won't cut it for the next ten years. That's not to say that they will fail, but it is to say that buying now you're taking a punt on the skill of management to adjust their business to the brave new world. 

As I see it, JBH used to be very good at generating foot traffic (you could think of it as being cheap customer acquisition) through their stores because of their emphasis on things like CDs and video games, which also created a connection between JBH and the customer for when the customer wanted to buy a bigger ticket item like a stereo or TV etc. As these products become increasingly purchased online how does JBH continue to attract that foot traffic?


----------



## skc

McLovin said:


> JBH didn't get to where it is just because of growing demand for electronic gadgets (although that provided plenty of wind in the sails).




I am interested to know the breakdown of JBH's sale/margin between big ticket items and small gadgets. Obviously the margin on a "convinence" style SD card would be higher than a big ticket item like a TV, but you'd probably make more absolute $ per "sales effort" on the bigger ticket purchases.

On the other hand, looking back there was a fair bit of wind in the sails in the last 15 years. 

Flatscreen TV, digital cameras and tablets were probably the biggest ones. Minor evolutions like 3D TVs, iphone n+1 etc don't have the same sustained replacement cycle. Smart phones were obviously big but the distribution channel of those are very different. 

I don't know what the next big thing is, but I'd lke to see someone come up with something like a mini smart home ERP suite.


----------



## tech/a

hiddencow said:


> I'm in!
> Technical gurus will probably tell me I'm being foolish but couldn't resist at current prices.
> 
> I see JBH is the leading electronics retailer in the country. Their fortunes will be dependent on new products and demand and the overall economy affecting people's discretionary income. I don't see Australians not spending any money on electronics anymore.
> 
> I'm hopefuly of growth in the medium to long term. In the meantime happy to collect my over 5% fully franked dividend.




How's that long looking?

Time to average down??


----------



## skc

tech/a said:


> How's that long looking?
> 
> Time to average down??




I think it's found the low for the week... as long as XJO doesn't fall off a cliff.

I wouldn't trade it directly, but it makes a candidate for a pairs trade against another retailer (e.g. DSH or HVN).


----------



## hiddencow

tech/a said:


> How's that long looking?
> 
> Time to average down??




Quite comfortable with it in fact.
Thank you for taking your time from being a super awesome trader to have concern for my position.
I've tried not to respond to your need to impose yourself onto these forums and provoke others who do things differently to you. You just keep asking for it though.

Small price movements up or down don't really concern me, my focus is on the next trading update at the AGM. Of course you do not understand this thinking and feel the need to come and gloat on the current loss on my position of less than a quarter of a percent.

Before I started posting on these forums I first came here to read the discussion on TGA a bit over two years ago. Of course you were busy deriding investors in that thread who were buying it when it was going down and thinking it was good value at those prices. Thankfully I didn't listen to your wisdom then. 

I will keep posting and reading these forums because there are a few contributors here who provide valuable insights and I have learned a lot from reading their posts. I will no longer be wasting my time responding to your posts.


----------



## herzy

hiddencow said:


> Quite comfortable with it in fact.
> Thank you for taking your time from being a super awesome trader to have concern for my position.
> I've tried not to respond to your need to impose yourself onto these forums and provoke others who do things differently to you. You just keep asking for it though.
> 
> Small price movements up or down don't really concern me, my focus is on the next trading update at the AGM. Of course you do not understand this thinking and feel the need to come and gloat on the current loss on my position of less than a quarter of a percent.
> 
> Before I started posting on these forums I first came here to read the discussion on TGA a bit over two years ago. Of course you were busy deriding investors in that thread who were buying it when it was going down and thinking it was good value at those prices. Thankfully I didn't listen to your wisdom then.
> 
> I will keep posting and reading these forums because there are a few contributors here who provide valuable insights and I have learned a lot from reading their posts. I will no longer be wasting my time responding to your posts.




Each to their own methods. Don't mind T/A, he means well (I think) even if he comes off as abrasive. 

I also lean towards the fundamentals side (although am not persuaded by JBH), as do plenty of excellent posters here. It would also be a mistake to disregard the opinions of those who lean towards technical analysis though.


----------



## hiddencow

skc said:


> I am interested to know the breakdown of JBH's sale/margin between big ticket items and small gadgets. Obviously the margin on a "convinence" style SD card would be higher than a big ticket item like a TV, but you'd probably make more absolute $ per "sales effort" on the bigger ticket purchases.
> 
> On the other hand, looking back there was a fair bit of wind in the sails in the last 15 years.
> 
> Flatscreen TV, digital cameras and tablets were probably the biggest ones. Minor evolutions like 3D TVs, iphone n+1 etc don't have the same sustained replacement cycle. Smart phones were obviously big but the distribution channel of those are very different.
> 
> I don't know what the next big thing is, but I'd lke to see someone come up with something like a mini smart home ERP suite.




The morgan stanley report shows an estimated breakdown of sales by product but there's no information on margins of each. I think JBH is very affected by surges in demand for certain products. MS also analysed flat screen tvs and wii consoles and compared them with the impact from the introduction of tablets.

I think Mclovin is probably right that a lot of their profits would have come from selling add on products such as cables and sd cards. I think they are still able to generate profits from these but to a lesser extent because everyone already has their TVs and cables and cameras and SD cards. There may be sales lost to the internet but that option has been there for the more cost conscious consumer for a long time along with computer stores which sell those products much cheaper. People are just not very aware of where to get the best deal or just too lazy.

JBH will do ok but not great until the next product that is a must have drives sales along with any accessories that go with that product and can be sold at higher margin. The iphone 6 will boost sales along with sale of cases but won't have too significant an impact as the majority are sold direct from apple or from the telcos.


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## burglar

herzy said:


> ..
> . It would also be a mistake to *disregard* the opinions of those who lean towards technical analysis though.




You don't need to lean towards T/A.
It leans on you.
I often ask what just happened there/then and don't get a Fundy answer.
Chances are you will find traders at work.

Share price action is an auction, and has no respect for value.
My take on it, after four years of reading Tech/a posts.

Traders are shorting JBH, 
Tis a fact. 
It is verifiable.

Has nothing to do with mobile phones or vibrator batteries.


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## tech/a

https://www.aussiestockforums.com/forums/showthread.php?t=18617&page=45&highlight=TGA

That call was ok?

So is an average down on JBH.
JBH still doesn't display any bullish
Signs technically. So would not be a
Buy from me.


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## Trembling Hand

hiddencow said:


> The morgan stanley report shows an estimated breakdown of sales by product but there's no information on margins of each. I think JBH is very affected by surges in demand for certain products. MS also analysed flat screen tvs and wii consoles and compared them with the impact from the introduction of tablets.
> 
> I think Mclovin is probably right that a lot of their profits would have come from selling add on products such as cables and sd cards. I think they are still able to generate profits from these but to a lesser extent because everyone already has their TVs and cables and cameras and SD cards. There may be sales lost to the internet but that option has been there for the more cost conscious consumer for a long time along with computer stores which sell those products much cheaper. People are just not very aware of where to get the best deal or just too lazy.
> 
> JBH will do ok but not great until the next product that is a must have drives sales along with any accessories that go with that product and can be sold at higher margin. The iphone 6 will boost sales along with sale of cases but won't have too significant an impact as the majority are sold direct from apple or from the telcos.




Hiddencow. That is interesting. When I read what you have stated above it is hardly a massive endorsement of the companies future growth prospects is it?

I wonder if the price decline is more attractive than the actual business?


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## hiddencow

tech/a said:


> https://www.aussiestockforums.com/forums/showthread.php?t=18617&page=45&highlight=TGA
> 
> That call was ok?




Go read back a few pages to where you bought, sold for a lower price and then bought back in for a higher price all the while throwing insults at all the people who just bought and are probably still holding today. I couldn't resist responding to you but now I've found the ignore function. I suggest you add me to your list as well so you don't end up giving your wonderful advice without anybody listening.


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## hiddencow

Trembling Hand said:


> Hiddencow. That is interesting. When I read what you have stated above it is hardly a massive endorsement of the companies future growth prospects is it?
> 
> I wonder if the price decline is more attractive than the actual business?




It's future growth depends on the release of new popular products which I'm confident will keep happening over the long run. There are definitely risks to its growth but there are positives as well. I mentioned in my first post that I'm buying cause I see JBH is the leading electronics retailer and I don't see the whole industry dying out.
At the current prices, I don't need growth to make an adequate return. Dividend of 5.5% with a payout ratio of 65%.

If growth does come then it will be a very nice bonus as the fickle market will probably rerate it up to a high PE once again.


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## herzy

burglar said:


> You don't need to lean towards T/A.
> It leans on you.
> I often ask what just happened there/then and don't get a Fundy answer.
> Chances are you will find traders at work.
> 
> Share price action is an auction, and has no respect for value.
> My take on it, after four years of reading Tech/a posts.
> 
> Traders are shorting JBH,
> Tis a fact.
> It is verifiable.
> 
> Has nothing to do with mobile phones or vibrator batteries.




Yes, traders influence shareprice. Yes their opinions have merits. Hence me suggesting you should not be disregarded... 

I disagree that 'share price... has no respect for value', but don't really want to derail the thread further - I was actually trying to help hiddencrow appreciate T/A's warnings and appreciate the potential merit of technical analysis generally. 

I also don't really know what your point is about traders shorting JBH - doesn't necessarily mean they're right, or that JBH share price will tank.


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## burglar

herzy said:


> ... I disagree that 'share price... has no respect for value' ...




JBH - 52 Week Range:
15.03 to 23.13

Call that respect?!







herzy said:


> ... I also don't really know what your point is about traders shorting JBH - doesn't necessarily mean they're right, or that JBH share price will tank.







Definitely going down!


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## rb250660

They must be desperate. I was standing in line at JB a while back waiting to pay for my wares and the bloke in front of me was paying for a $29 digital TV box. The girl on the counter was pushing him to buy extra warranty for 'only' $20. He laughed at her and said if it broke he'd throw it in the canal behind his house and just buy another one. An anecdotal indicator that they are relying on the upsell.


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## Tightwad

dick smith and others would have probably done the same, did she ask him if he wanted it installed for 99 bucks?


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## Julia

Tightwad said:


> dick smith and others would have probably done the same,



Yes.  I was given the spiel about various Notebooks I was considering at Dick Smith and was offered "for an extra $40 we can set it all up for you".  Yeah?  What are you actually going to set up for the $40?

Answer:  we can put your email address and password on the new device.

"Anything else?"   Um, probably not.

"I don't think so"


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## burglar

From The Motley Fool:
 ... hold-onto-your-jb-hi-fi-limited-shares/



> Earnings growth guidance for FY 2014 has been recently reaffirmed at 8.3%-10.8%. This reflects JB Hi-Fi’s quality business model and proves to investors that it *won’t go down without a fight.*



My bold!


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## Sir Osisofliver

See the Newbie thread in my signature..I discuss JBH.

No offence to anyone posting in here and thank-you very much for your input.

Cheers

Sir O


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## tech/a

Sir Osisofliver said:


> See the Newbie thread in my signature..I discuss JBH.
> 
> No offence to anyone posting in here and thank-you very much for your input.
> 
> Cheers
> 
> Sir O




My technical view is over there as well.


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## notting

Either we are about to enter into a recession or JB should start to get  get happy from around here!
Not much volume in today's selling as it broke down through 14.80.


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## Bazmate

Anyone get the impression that the reporting due tomorrow might not be good news for JB HIFI?

Personally I think it's sold a bit hard and there might be an opportunity... I'll see how my trigger finger feels at 1555.

Any other thoughts in the meantime?


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## hiddencow

Sales update released and the market seems to like it.
Pretty much in line with what I was expecting.
Do not underestimate the power of the Iphone.


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## VSntchr

...so thats what short covering looks like :


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## hiddencow

Less than 1% of shares traded so far today and with about 12% of shares sold short hopefully there is more short covering to come.


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## tech/a

http://stocknessmonster.com/news-item?S=JBH&E=ASX&N=414061

No short covering.
Shorts will not be effected by an optimistic *Directors report*.
They are there because of Macro economic factors---which will trump optimism.


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## hiddencow

Data for the short positions for last Wednesday's results have been released and total short positions actually increased by about .4%.

ABS retail turnover data for September also released:
http://www.abs.gov.au/ausstats/abs@...676AC4CC578D6559CA25773400204519?Opendocument

9.2% increase in electrical and electronic goods retailing for the month. IPhone 6!


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## hiddencow

Half year results released today.
Headline profit figures are a little disappointing for me.
Sales growth in January is spectacular though. With the 4th quarter being terrible last year, full year results should comfortably beat last years. Cash flow was very good with debt eliminated and cash balance increasing. This is mostly timing of purchases though with an increase in payables.

Slight increase in dividend and the market seems to like it initially.

Happy to continue holding unless it really takes off with some bandwagon hoppers.


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## notting

New Iphone hype didn't last long.
Bit like the positivity on today's report, was good till about 10:30 at which point the squeezed maybe started getting back in!


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## hiddencow

So JBH has risen a lot recently.
Sales update was included in the announcement today in case anybody missed it, wasn't marked as market sensitive for some reason.
Last quarter figures are very positive, continued from January which was reported at the half year results. They didn't update the guidance but based on a weak 4th quarter last year, I predict they should beat the guidance.

Maybe it's time to unignore the duck so I can get an indication of when to sell when he hops on.


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## galumay

hiddencow said:


> ....
> 
> Maybe it's time to unignore the duck so I can get an indication of when to sell when he hops on.




Gold!


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## Tooth Faerie

Exited my position today. ROI a little more than 30% over a 6 month period. I could be totally red-faced when it turns out that I took profits too soon.

It was the first stock I ever bought and I had no idea what I was doing. It was pure luck.


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## Tyler Durden

I could be wrong, but there appears to be a trend for new computers to NOT have a CD/DVD drive.

Obviously this would have some sort of impact on stores that sell DVDs. The degree of impact is unknown. I'm not sure how much DVD sales make up of JBH's revenue, but I'd imagine it was a key element in getting people through the doors in the first place. JBH without movie DVDs would not be JBH.


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## galumay

Tyler Durden said:


> I could be wrong, but there appears to be a trend for new computers to NOT have a CD/DVD drive.
> 
> Obviously this would have some sort of impact on stores that sell DVDs. The degree of impact is unknown. I'm not sure how much DVD sales make up of JBH's revenue, but I'd imagine it was a key element in getting people through the doors in the first place. JBH without movie DVDs would not be JBH.




You are right Tyler, DVD's are on the way out. Not just because computers increasingly dont have them, but the biggest threat is the NBN. Streaming video services are increasing subscriptions at a rapid pace. 

I know our combination of Foxtel & Netflix in our household has meant we no longer buy DVD's- even when we go to Bali!

I suspect JBH have already seen a big drop in sales from DVD's, I suspect they dont make up much of the business overall - but thats just a gut feeling.


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## Ves

From the 2015 results presentation on 10 Aug 2015:

Sales from hardware & services*    83.4% of revenue   (74.8% in 2011)
Sales from Software  16.6% of revenue.  (25.2% in 2011)

*Hardware and services is defined as all sales excluding the Music, Movies and Games software categories.

Gross margin hasn't really moved much since 2011,  so it doesn't appear that the long-term trend of sales being more and more hardware based has had too much of an impact.


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## MrBurns

Now that Dick Smith is closing that's one less competitor for JB...they should benefit greatly.

The only place to go for a TV these days is JB and Harvey Norman.


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## Knobby22

MrBurns said:


> Now that Dick Smith is closing that's one less competitor for JB...they should benefit greatly.
> 
> The only place to go for a TV these days is JB and Harvey Norman.




And the Good Guys!


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## MrBurns

Knobby22 said:


> And the Good Guys!




True but when I think of them I think fridges and washing machines.


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## MrBurns

Kogan buys Dick Smiths online business, brands and web sites.

JBH price declines...........


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## notting

MrBurns said:


> Kogan buys Dick Smiths online business, brands and web sites.
> 
> JBH price declines...........




Yeah that's a pretty interesting move.
Jerry Harvey has recently been moking the relative size of online trading and sighting that it seems to have stopped growing, there for his model has been reinstated.
Go Kogan, though  I do like JB, just not Harvey.


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## MrBurns

notting said:


> Yeah that's a pretty interesting move.
> Jerry Harvey has recently been moking the relative size of online trading and sighting that it seems to have stopped growing, there for his model has been reinstated.
> Go Kogan, though  I do like JB, just not Harvey.





It's a logical move for Kogan.


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## notting

MrBurns said:


> It's a logical move for Kogan.




Very much so.  Brings the Kogan brand into house hold vernacular. Rather than niche online for the savvy.


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## peter2

It looks like corrective price movement in JBH has completed. The abc pattern has ended at 24.00, which was past resistance. 

Retailers have certainly been sold off recently. With an initial target of 30.00 the RR is tempting.


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## Wyatt

Here something for the FA crowd and non believers. Some retailers back in vogue for now.


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## Country Lad

It would appear that the purchase of The Good Guys may not have been such a great idea as a few in the industry had forecast. JBH shares down 9% after announcement that Good Guys sales down 2.9% but the JB HiFi business sales up 4%.  Changing the business model of Good Guys may take a while longer yet.  HVN went down 2.6% in sympathy.


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## greggles

Country Lad said:


> It would appear that the purchase of The Good Guys may not have been such a great idea as a few in the industry had forecast. JBH shares down 9% after announcement that Good Guys sales down 2.9% but the JB HiFi business sales up 4%.  Changing the business model of Good Guys may take a while longer yet.  HVN went down 2.6% in sympathy.



I always thought that The Good Guys was an odd purchase for JBH because it seemed to replicate a lot of the business they already had. I thought it would have made more sense to purchase a thriving business that was more complementary rather than an overlap. While I'm sure there is a lot of demand for phones, tablets and white goods, there is also a lot of other competition and it does appear to be a somewhat crowded and mature market.

Unless they diversify a little I'm not sure how much more organic growth they can generate from here, especially as a bricks and mortar retailer.


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## MarketMatters

The results are in and yes the acquisition of Good Guys has done little to stem off the short sellers (now running at 19.14% one of the highest shorted stocks). Outlook is subdued. https://www.marketmatters.com.au/news/jb-hi-fi-jbh-good-result-report/


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## bigdog

The market liked today's  2019 Full Year Results ASX update




















066


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## greggles

JB Hi-Fi smoking the competition: https://www.news.com.au/finance/bus...e/news-story/eb81fda3f81fbdddcc6588fb07074bc6

With 94.5% of sales made in store as opposed to online, JBH's success is challenging the idea that traditional bricks and mortar retail is on the way out.


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## finicky

*Bricks and Mortar Retail Wreckage

HY20 Trading Performance
JB Hi-Fi Limited* (“Company”) 

• Total sales up 3.9% to $4.0 billion, with positive comparable sales growth across all three divisions;
• EBIT up 8.0% to $255.6 million;
• Net profit after tax (NPAT) up 8.9% to $174.4 million (Statutory NPAT up 6.6% to $170.6 million);
• EPS up 8.9% to 151.8 cps; and
• Interim dividend up 8.8% to 99 cps.

Group CEO, Richard Murray, said “We are pleased to report* record sales and earnings in the first half*, with 
JB HI-FI Australia and The Good Guys recording strong earnings growth

*Monthly




*


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## Trav.

JBH came up in a scan and I checked out chart below for some confirmation and I liked what I see. Recent ATH of $55.25 will hopefully be challenged.

Trade entered today..


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## over9k

Bumping for range & speculation opportunities: 






I bought some months ago before the june-september run but bailed out of it way too early


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## JohnDe

JBH chart is a fair indicator of consumer confidence. Down 6% in 5 minutes, might be slowly heading back to pre-pandemic prices.


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## Dona Ferentes

JohnDe said:


> JBH chart is a fair indicator of consumer confidence.



_I think you rang the bell there_, JD.

Looks like JBH has bounced a bit, and made it back to $44 in the last few weeks.

 One longer term buyer ($50M of stock), Australian Foundation (AFI), articulated its charm when it reported their FY Results: "_JB Hi-Fi is the largest consumer electronics retailer in Australia and New Zealand.  While primarily providing attractive income to the portfolio we expect the consumer electronics category to continue delivering meaningful growth."_



> JB Hi-Fi was attractive from an income and capital gain perspective, [MD of AFI, Mark] Freeman argued, saying the retailer had “_proven its resilience over time_”.





> He expects the consumer electronics category to continue delivering meaningful growth despite the tougher outlook for discretionary retailers. “_The market always gets concerned about periods where there’s nervousness around discretionary spending COVID or inflation, or in the past, the GFC – but what we’ve observed historically is the products they sell are pretty resilient, and its sales ... they run a very good business,_” he said. “_We think the multiples at the moment are very fair, and the yield is over 5 per cent fully franked.”_


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## sptrawler

Dona Ferentes said:


> _I think you rang the bell there_, JD.
> 
> Looks like JBH has bounced a bit, and made it back to $44 in the last few weeks.
> 
> One longer term buyer ($50M of stock), Australian Foundation (AFI), articulated its charm when it reported their FY Results: "_JB Hi-Fi is the largest consumer electronics retailer in Australia and New Zealand.  While primarily providing attractive income to the portfolio we expect the consumer electronics category to continue delivering meaningful growth."_



I wont be selling my AFI to buy JBH, but as AFI says they are a well run business in a competitive space.


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## Dona Ferentes

Is the move by consumer electronics and whitegoods retailer giant, JB Hi Fi to go against the grain and spend the next three years upgrading and expanding its NZ operations a sign that it believes the Australian market is going_ ex growth_?

Buried in its 2021 22 results on Monday, JB Hi Fi CEO Terry Smart sprang a major surprise with news the company would be looking to not only polish its existing stores across the Tasman, but look for significant growth from them.....

.... Across Australia and NZ, JB HiFi saw :

sales rise 3.5% to $A9.2 billion for the year to June (it failed to keep up with inflation of 6.4%),
net profit was up 7.7% to $A545 million and
online sales for the year jumped nearly 54% to $A1.63 billion.
JB Hi said it had declared a final dividend of 153 cents a share fully franked, up 46 cents or 43.0%, bringing the total dividend for 2021/22 to 316 cents a share, up 29 cents or 10.1%, and 65% of net after tax profit.

On  top of this year company ended a $250 million Off Market Share Buy Back  in April, meaning the Group returned $604 million to shareholders for the 2021/22 financial year


----------

