JBH - JB Hi-Fi

[Intrinsic 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.

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]

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]

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]

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]

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]

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]

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]

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]

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]

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!