TRS - The Reject Shop

[GumbyLearner]

Holy hammering. That's ugly. I wonder if it's across the board retail or just non-essential cheap stuff.
Holders would be crying at the return on the divvies if I they had bought within the last 12 months.

 

[niknah]

They're not the cheapest shop. But I've seen them take over spots from other bargain stores and bring in more customers, like the one in broadway. You can fit two people through an isle there, you won't make it through an isle at hot dollar if you're obese, and they're better staffed usually.

But if the cause is high interest then this doesn't look good, no ones betting on interest rates coming down, only stable or up.

 

[VSntchr]

Average in-store spend is something like $13, they are a low cost provider...providing somewhat essential type items...
The statement that interest rate rises have caused the profit downgrade seem a bit dodgy to me.

I could of course be completely wrong, but in a recent Eureka Report article I noticed that a column writer pointed this out also. He seemed to think it may be an ordering problem or something similar...

Something to consider!

 

[Smurf1976]

Commonsense tells me that if interest rates are rising and consumers are struggling financially then that ought to be good, not bad, news for a discount retailer?

A discount store blaming tough economic conditions for their troubles seems comparable to an unbrella salesman blaming the rain for people not buying umbrellas. Doesn't really make a lot of sense to me.

 

[Julia]

The following is Huntley's explanation. Also, the SP has run pretty hard in a sideways market. I wouldn't be regarding the present situation as a permanent dislike of the stock overall.

 

[tinhat]

I bought some at 13.41. Let's see what happens next...

 

[robusta]

I bought some at 13.41. Let's see what happens next...

Heve been wanting to pick up a piece of this business for a while now. Maybe tomorrow will provide that opportunity.

http://www.asx.com.au/asxpdf/20110113/pdf/41w5gkynhj1z44.pdf

 

[niknah]

With the flooding of the Ipswich area on January 11,
the base level of the Distribution Centre is now under several metres of water.
The Centre is likely to be closed for a minimum period of 8 weeks due to significant water damage to
equipment; including but not limited to some components of the conveying equipment, forklifts,
computer equipment and potential significant electrical damage. Access to the Distribution Centre over
the last 48 hours has been restricted and therefore a full assessment of the damage has not yet been
possible.
A significant amount of inventory held in the distribution centre was lost. The Company has insurance
in respect of inventory and assets which should enable such losses to be fully recovered.

...

The Company has the capacity to service its overall store base from Melbourne and will be able to
commence some service to those stores currently serviced from Ipswich within the week.

According to their last annual report, the Ipswich distribution center services about 80 out of 200 stores.
They had $50mill in inventory.
Their stockturn is 5.8, approx 8 weeks.

Fortunately the Ipswich distribution center is only a year or two old and they had survived without it before then.

 

[Noddy]

One thing I've learnt about share trading -

Good news does't always lift the share price, but bad news always has a negative effect.

Regards to all
Noddy

 

[Julia]

One thing I've learnt about share trading -

Good news does't always lift the share price, but bad news always has a negative effect.

Regards to all
Noddy

Do you feel like offering why you think this is so?

 

[fanger]

Lets hope the stock doesn't get hammered to much as its already down 30% after its profit down grade.

 

[skc]

Lets hope the stock doesn't get hammered to much as its already down 30% after its profit down grade.

Chart is showing a good double bottom and stock spiked down today on bad news but now trading up. Coupled with much better sentiment towards retail stocks this week...There's probably a trade on the offer with TRS. Swing high target ~$15 to $15.5 to partially close the gap.

 

[robusta]

One thing I've learnt about share trading -

Good news does't always lift the share price, but bad news always has a negative effect.

Regards to all
Noddy

Did not get cheap enough for me. Sooner or later opportunity will come with TRS or another company will show itself.

 

[skcots]

Chart is showing a good double bottom and stock spiked down today on bad news but now trading up. Coupled with much better sentiment towards retail stocks this week...There's probably a trade on the offer with TRS. Swing high target ~$15 to $15.5 to partially close the gap.

View attachment 40841

Is'nt there too much volume on the second bottom?
I mostly look at fundamentals so this kind of thing is new to me.

 

[skc]

Is'nt there too much volume on the second bottom?
I mostly look at fundamentals so this kind of thing is new to me.

Volume at second bottom relative to first is pretty light.

Resistance at $15.1 offers a reward of ~$2 compared to a risk of 40c (assuming stop at today's low), or R:R ~5.

 

[skcots]

Volume at second bottom relative to first is pretty light.

True. I must have misread the chart earlier.

 

[zac]

Im new to learning about stocks etc,
I was only tonight looking at the Reject Shop as its been quite the success story but December 8 where the share price dropped rapidly, is there any reason/event that caused it?

It was around that date some people calculated the Intrinsic Value of the shares to be $15-16, yet recovery hasnt seemed to have occured.

Its just made me lose a little confidence in the whole value investing theory etc

 

[skc]

Im new to learning about stocks etc,
I was only tonight looking at the Reject Shop as its been quite the success story but December 8 where the share price dropped rapidly, is there any reason/event that caused it?

It was around that date some people calculated the Intrinsic Value of the shares to be $15-16, yet recovery hasnt seemed to have occured.

Its just made me lose a little confidence in the whole value investing theory etc

Learn to search company annoucement on the ASX website would be a good start for your learning.

 

[oxygen]

Anybody got any thoughts on the new low reached this week? $11.35. Starting to look attractive again IMHO and get a Valu.able valuation of 10.99 for 2011. A drop into low to mid 10's could present a good buying op here. Last i heard Roger's own valuation was about $10.20.

 

[Country Lad]

......... Starting to look attractive again

Could get even more attractive over the short term.

"Whilst the Company’s insurance policies are robust, the recoupment of all losses associated with the flooding is uncertain and any estimate is premature at this stage, particularly with respect to the ongoing impact on sales, gross margin and increased costs of working throughout the half.

As a result the Company is unable to provide updated profit guidance as the overall impact of the Queensland floods can not be fully evaluated at this stage."