This is a stock I regret selling. When I was young and silly I had it at something like 70c at one point and then sold at around 76c after they reported a slowdown in CD sales and I got the jitters.. Then it went to $2.. Now I decided to have another look tonight, ran the numbers and was suprised.
(I do not hold this stock at present)
Right now, on EPS valuation, they look extremely undervalued, but of course we know there has to be a reason why..
On comsec EPS forecasts are EPS 22.2, 26.8 and 29.1.
By my numbers, with zero growth after that, and a sell PE of 10 they still come out ahead of where they are now. Return on equity is harder to judge as they are a diversified retailer and how much book value can a retailer have? (Their BV has been all over the place since listing and in fact 2005 is not that much more than 1995)
So one reads their reports and they seem to not give any concrete guidance yet, except that there is margin pressure there. The analysts (according to Comsec) are pretty positive which is scary in itself
And I do not know which analyst Comsec has based its EPS/DPS figures on..
So I suspect that perhaps the market is expecting a cyclical downturn in the retail sector maybe? (I am assuming this because McPhersons (MCP) appears to in a similar situation to BRZ).
Therefore, the EPS forecasts in Comsec may be hopelessly optimistic.
So if you *halve* the 3 year EPS forecasts and grow it by 6% per annum after that.. it comes out some 20% below todays price. If you agree with the current forecast and grow it by 6% it becomes 80%+ above todays price.
So I am interested in comments on this one? (for me, in the context of at least a 12-24 month hold but a traders perspective would be useful too)
(I do not hold this stock at present)
Right now, on EPS valuation, they look extremely undervalued, but of course we know there has to be a reason why..
On comsec EPS forecasts are EPS 22.2, 26.8 and 29.1.
By my numbers, with zero growth after that, and a sell PE of 10 they still come out ahead of where they are now. Return on equity is harder to judge as they are a diversified retailer and how much book value can a retailer have? (Their BV has been all over the place since listing and in fact 2005 is not that much more than 1995)
So one reads their reports and they seem to not give any concrete guidance yet, except that there is margin pressure there. The analysts (according to Comsec) are pretty positive which is scary in itself
And I do not know which analyst Comsec has based its EPS/DPS figures on..So I suspect that perhaps the market is expecting a cyclical downturn in the retail sector maybe? (I am assuming this because McPhersons (MCP) appears to in a similar situation to BRZ).
Therefore, the EPS forecasts in Comsec may be hopelessly optimistic.
So if you *halve* the 3 year EPS forecasts and grow it by 6% per annum after that.. it comes out some 20% below todays price. If you agree with the current forecast and grow it by 6% it becomes 80%+ above todays price.
So I am interested in comments on this one? (for me, in the context of at least a 12-24 month hold but a traders perspective would be useful too)
