Originally Posted by
BlackPeter
Hi BB, I agree - if you are happy with the divvie and don't mind too much how your capital account looks like at any point in time, than WHS is more likely than not to return for years coming more than the good old savings account.
Personally however I prefer to hold undervalued stocks paying nice dividends. Looking at WHS - it still pays a nice dividend (though not best in town), but I certainly would not consider them as undervalued. Actually - they are currently ahead of their mean 12 month analyst target (305 with a range of 275 to 320), which means that at least medium term the risk of the SP dropping seems to be higher than the chance of it rising (in the view of the analysts, anyway) ... and if the Christmas season does not shape up as hoped for, they might need to pay parts of this years divi out of the cash flow.
Not sure, how relevant the look into the rear mirror is ("Over the last 5 years its only gone below 3$ for a one year period"). Remember "past performance is no indication for future returns". WHS operates in a quite fast changing industry, and it is everybody's best guess how they will look after the transition. Yes, they used to do in the past well in some transitions, and poor in others (e.g. "conquering Australia"). Yes, they definitely try to change (adding financial division, adding better quality product lines, focussing on staff training and retention), but there is still lots to do (inefficiency, customer perception) and time is running short. And - as indicated before, they clearly miss the "X-factor", it is just not cool to buy stuff in the Warehouse (and not sure about their other brands either).
Personally quite happy to be out (despite selling with a loss) ...