JST - Just Group

[nomore4s]

Is anyone on this? Having a good day so far, but might get sold down later today like yesterday. Have a look at the selling depth, not much on offer atm.

 

[Buffettology]

Definately better value elsewhere than JST at the moment. So I wouldnt accumulate at current prices.

Though, I will continue to hold for long-term growth.

 

[Rainmaker2000]

JST has been getting absolutely hammered lately.....no doubt interest rate concerns and the like.....its falling back to more reasonable levels....the business looks in pretty decent shape still...I checked out a store in their new Smiggle acquisition.......must say I was very, very impressed with the business model and would not mind if JST gave specific financials just for it.......alas I doubt they will.....I reckon, the Smiggle store carried less than $1000 worth of inventory at cost in its Westfield mall.......if they can make those economics work paying Westfield rents, well, that may redefine the term 'low working capital'

 

[Buffettology]

JST has been getting absolutely hammered lately.....no doubt interest rate concerns and the like.....its falling back to more reasonable levels....the business looks in pretty decent shape still...I checked out a store in their new Smiggle acquisition.......must say I was very, very impressed with the business model and would not mind if JST gave specific financials just for it.......alas I doubt they will.....I reckon, the Smiggle store carried less than $1000 worth of inventory at cost in its Westfield mall.......if they can make those economics work paying Westfield rents, well, that may redefine the term 'low working capital'

Absolutely.

JST is a fantastic price currently.

I will be accumulating more after a bit more time on the sidelines, Im not convinced weve seen the end of this slide.

 

[Buffettology]

OUCH!!!!!!!!!!!

This one is just going through the floor, luckily I sat on the sidelines without accumulating more. If this keeps sliding, I will definately be taking another chunk of it into my portfolio.

Still, I cant wait for its profit release, no news released and this bigger downturn? Infact, the latest report, retail figures still remain relatively robust.

Another one of JST irrational swings! Mr Market is feeling mighty generous!

 

[brettc4]

This one is certainly on my watch list. Seems to have been overly punished but then again it has always been volatile.

It does however appear to have a fair amount of debt, which may explain why it is getting hammered so at the moment.

 

[Buffettology]

This one is certainly on my watch list. Seems to have been overly punished but then again it has always been volatile.

It does however appear to have a fair amount of debt, which may explain why it is getting hammered so at the moment.

Yeh, it is holding quiet a bit of debt, but its still TINY relative to its yearly NPAT. Could easily wipe a chunk of that debt off in one year if it wanted.

Definately a volatile, irrational stock.

I will be more careful with this one in future. I lost quiet a lot on it, tripple any of my other losses in this latest downturn.

 

[Rainmaker2000]

Buffet, JST is a fine business.....I agree debt is not a problem especially since management was bred from private equity and know how to use debt well......they have wiggled well into range and I'm taking a very close look at it again.....I just can't believe it hit $6 high but it is worth around 5 which is around I last sold...since then its continued to develop.....I've got to be careful with JSt cause I have a real soft spot for them...I'm particularly fond of Peter Alexander and the US, South Africa and Smiggle in particular........at this prices, you get all this for free at least....there is a threat of profit warning but its been more than priced in.....a profit warning would be more share price pain, but only short term

 

[Buffettology]

Buffet, JST is a fine business.....I agree debt is not a problem especially since management was bred from private equity and know how to use debt well......they have wiggled well into range and I'm taking a very close look at it again.....I just can't believe it hit $6 high but it is worth around 5 which is around I last sold...since then its continued to develop.....I've got to be careful with JSt cause I have a real soft spot for them...I'm particularly fond of Peter Alexander and the US, South Africa and Smiggle in particular........at this prices, you get all this for free at least....there is a threat of profit warning but its been more than priced in.....a profit warning would be more share price pain, but only short term

Yes, I agree with you Rainmaker. I have a soft spot for them also! Peter Alexander is doing great and their management are definately using debt well. Their share buy backs were a brilliant thing!

Yeh, near $6 was overpriced, and whilst I hold for the long-term, I sold out all my stock in this one at $5.88. Too bad I bought back in at $5 which I thought was a "fair" price for a bullmarket. (Goes to show, NEVER get greedy and start pricing things based on bullmarket prices), as Buffett says, if you can find one good buying opportunity a year, you are doing well! I started finding a few good buying opportunities, because I adapted my evaluations for bull market times. How stupid! Ah well, I thought I was evolving (more like just getting greedy), stupid considering Mr Market does not evolve!

But I do agree, this is only one of two stocks I am riding out as I think its just a short-term swing and quiet undervalued! The rest I sold closer to the highs and only had to take a relatively small loss on one stock.

Retail figures however, remain robust!

As for your BBG post, I would be careful of this one. I still think its overvalued. Just my opinion. All the best.

Cheers

 

[TheRage]

I have looked at this stock a few times in the past and never quite completed a full analysis as I have for my own reasons been fairly resistant to retail stocks in the past. Price is now starting to look good but one thing concerns me and I can't explain it without digging out 2006, 2007, financial reports. I was hoping one of you guys keeping a close eye on it might explain the oddity. In July 2006 financial year shareholder's equity was 97.3 million. In July 2007 shareholder's equity was reduced to 53.3 million down 44 million. The payout ratio for 2006 was 65% which would indicate 35% should have been retained. Instead equity dropped by 45%. How does this add up. Shares outstanding haven't changed too much so I am assuming this dilution hasn't been due to a business purchase. The reason this concerns me is that the ROE looks fantastic but if the company is not retaining any profits but returning them all as well as a bit more then the real ROE is different. The part I don't understand is how has the shareholder's equity dropped the way it has. Is my data wrong?

 

[Rainmaker2000]

hehe, I'm a bit lazy to have a look at the reports for this....all I can say is, JST issued capital has stayed constant with the only change in capital since listing in 2004 was the off market share buyback in 06 which bought back about 7% of shares......so I'm not sure if that explains it.........just has always had a very good ROE mainly because the employment of copius amounts of debt......With debt now being relatively moderate, I think the ROE is still quite impressive......Don't be fooled by the generous dividend ratio, JST still invests much earnings into the business...its just that 'Mr Market' has always valued it between PE 12-15 generally

Just on BBG, it is certainly not dirt cheap, but if past performance continue into future, it will look very cheap...I did say if....I'm much more confortable owning JST but that's only cause I shop at Jay Jays...don't tell anyone

 

[Buffettology]

Yes, this is the confusing part and a thing that made me worry a bit at first, of course it makes ROE look that much more impressive, but regresses its book value and hence makes it harder to value (ROE up on a lower book value, is that better or worse?). This is shown in the difference of non-current liabilities on the balance sheet. The only area of the balance sheet which has dramatically changed from 2006-2007 and hence changing net assets (or equity). It shows about a $42 million increase in 2007 Interest Bearing Liabilities, which appears to attributable to..............not completely clear.

However, in the notes to financials it states that $40 million of unused finance facility funds were accessed in 2007 and this was used to fund the aquisition of Smiggle. (However, Smiggle aquisition was only initially $23 million?).

The financials and notes to financials are a mess IMO, however it is apparent that an interest bearing liability of $40 million (used partly to fund smiggle) is the difference in NCL and therefore this is what accounts for the change in equity.

So the company is not returning more than profits and your figures are not wrong.

Hope this helps somewhat. Fukc I hate sifting through the statements and their notes, I did it as a job for a year when I was a financial analyst (still find it hard to read and understand some of the financials as notes are always very limited and awefully explained, no idea how they pass audit) and would not care if I never had to do it again! Thats the worse part about being a Fundie as opposed to a Techie!

ha ha, I very rarely shop at any JST outlets, but my girlfriend buys a bit from Portmans. One thing I do take notice of also is the amount of traffic at the stores when I walk past, at least in my City, the traffic at Peter Alexander was FLOWING last year, it has died down a bit this year! Hope its only in my location!

 

[Rainmaker2000]

Gees, that was an impressive result from JST and Smiggle looks just exceptional......its already delivered 2.6 million in half year on the basis of the 24 mill price tage to date...

Some of JST operating ratios are just brilliant....their gross profit ratio is up considerably, I think because of our strong currency mainly...maybe a mix of higher margin Peter Alexander goods too...

Their return on capital is quite incredible at 67% and to an extent reflects their love of debt...still its a massive figure........JSt is about the only retailer operating off a private equity model I know of......when it works, it really works...

Their debt is a concern...but they are clearly not concerned..as they say, its less than half year ebita.....which is a suggestion that they could get rid of it if they had to...debatable..still I've had to rebalance my portfolio...

 

[2BAD4U]

Got on board with JST today, hasn't broken it's downtrend but seems to have found support around $3.50. Depending on what model you use for fundamental analysis (DDM, DCF, etc.), they put this stock as being quite undervalued. Mind you in the current climate I think those models would rate alot of shares as being undervalued.

 

[Rainmaker2000]

Well, not too much joy in the market of late but the correction has at least allowed us to pick up some bargains........

Buffetology, are you still on board......Premier Investments has launched an el cheapo takeover bid, but for those of us who re-entered the fray a matter of weeks ago, el cheapo bid is still a nice return on a few weeks non work...

http://news.smh.com.au/premier-launches-takeover-bid-for-just/20080331-22ld.html

It's a cheap bid but gives opportunity to recycle funds into other cheap stocks....although I'm undecided as the bid should rise to at least $5....trading halt until noon

 

[The Trooper]

Does anyone know anything about Premier or whether their scrip would be worth having? Takeover bid seems opportunistic but may be worthwhile if Premier can perform. Notice that premier price PMV plummeted 10% after the announcement so that obviously devalues the effect of their takeover bid if exchanging for scrip?

 

[Rainmaker2000]

Premier is Solomon Lew's listed vihicle for his little dabs at investment in retailing.....Basically it is a cash box after he exited many investments, with the holding in the perrential struggler Housewares International....

The bid is more of a merger I guess and there is some obvious value in Premier with its unused franking credits and discount to NTA........That won't be enough for me to vote however

 

[2BAD4U]

The bid is more of a merger I guess and there is some obvious value in Premier with its unused franking credits and discount to NTA........That won't be enough for me to vote however

I'm with you it doesn't excite me. Had a look at PMVs chart and there isn't a lot of activity in them, I haven't looked at their fundamentals yet. Personally I think there is more opportunity with JST and I think the offer is well below their true value.

As I posted a couple of weeks ago, I have only just bought JST because I believe they are undervalued, obviously so do PMV.

 

[Rainmaker2000]

I love it when a takeover offer brings out up to date financial results, before profit season...and specific information right across their retail portfolio...

Check out JST sales in the last 8 weeks, they seem abnormally high for what should be a very poor retail climate......total sales are actually up over last 17 weeks which is a nice sight to see in what is meant to be a very difficult market

Most pleasing is JST acquisitions of recent years are killing them........JST didn't admit it, but its now clear that Dotti was close to being a distressed business when they purchased it's 10 stores for a relative few million........it took a while to reingineer it but it looks like right now is Dotti's finest spurt with same store sales obviously adding much cash...........add that to the phenomenal sales growth of Peter Alexander and Smiggle......

I've never thought of JST as a 'growth company', but if Peter Alexander in particular works in the US market, I'd have no idea what JST could be worth.....I'd say that my selling at $5 was a mistake based on subsequent performance....but then then its not exactly selling at $7 now....hehe

 

[2BAD4U]

So what's the feeling out there on a subsequent (increased) offer from PMV? As is usually the case, the advise to reject the offer has caused the share price to head south.

My feeling is that given the economic conditions and reduced consumer confidence, I don't think there will be an increased bid, as PMV may be hoping the price falls further as a result.