last chance to buy below 4.00, now!
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last chance to buy below 4.00, now!
Finally snagged some at $3.74!
What's with the big bid/ask price gap? It has been pretty boring stock to watch over the last couple of weeks but patience paid off.
Patience almost always pays off in this game.
Gap could be caused by more people with great desire to hold than sellers willing to match them. Hard to say. FA is looking gold, but it hasn't been a smooth ride in the last 12 months so buyers may be waiting for a better history before committing.
Hesitance may also be caused by the falling NZ dollar, putting the squeeze on gross margins on imported products for retail.
On the plus side, it will make the translation from Aus $ to NZ $ on record date look better.
Plenty of commentary starting to emerge that consumers are going to have to get used to paying a bit more due to the fall in the dollar so I don't expect any meaningful margin compression. I remain convinced that HLG have a nice sweet spot in the middle price zone of the apparel business, much like Briscoes do in the home-ware business.
I agree Roger, my opinion still remains the same - gobble them up while you can.
Given that the retail environment is heavily competitive, I'd expect the fall in the NZ $ to hit more on margins rather than on consumer prices tho.
Not worried at all about HLG tho.
The annual report says a 10% movement in exchange rate will have a ~300k effect on equity.
Does this seem too low? If you add 10% to COGS it is in the order of $8M, which is half their profits.
We may be fine for this year due to hedging but going forward if the US and NZ have similar interest rates the profits we have seen in previous years could be under threat?
Hi James,
What page does it mention the 10%? I'm interested to read it.
My understanding is they use forward rate contracts for 100% of their committed purchases and are 30% hedge for 12 month in advance, so I don't see half their profits running away from the low NZ $.
I beleive it is only a concern if the NZ $ remains low for the long term, then it will either put the squeze on gross margins and then, as Roger mentioned, prices may have to go up.
However, this is not specific for just HLG & will impact their competitors as well. It will also be a disincentive for consumers to shop online from overseas. Also, the translation rate at record date will 'look' good. So pro's and con's to the low dollar, HLG's ability to effectively hedge will be what makes the difference.
The Note in the Accounts that that figure you quote relates to financial instruments. The values mentioned as to the impact on the value of those under the sensitivities mentioned.
I don't think it is meant to cover what might happen to normal trading activity, like COS etc
Think that's the story
That's the one Winner.
I wonder when the next earnings update will be popping up.