Flat last quarter sales-announcement 8 April-now catching up with the rest of the market.
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Flat last quarter sales-announcement 8 April-now catching up with the rest of the market.
MHI:Blue Sky & Sausages For Sale Thread gaining wider circulation outside the STrader community.Quote:
quote:Originally posted by rmbbrave
MHI has fallen from over $8 to nearly $7 in a week!
Does anyone know if there is a special reason for this?
Alas I can't comment on NZ shares any longer, but k1w1 :D:D
Fisher Funds own this stock
Profit up 9.6%, Dividend up 9.5%, SP down 6.5%. The same thing happened 6 months ago - only the drop was greater. The SP shot back up a few days later.
19 Aug 2005 04:18
FLLYR: MHI: FY to 30/06/06 $16,510M ($15,060M) +9.6% DIV 14cps
Michael Hill International Limited
For Full Year Ended 30/06/05
This Report has been prepared in a manner which complies with generally
accepted accounting practice and gives a true and fair view of the matters to
which the report relates and is based on audited accounts.
CONSOLIDATED OPERATING STATEMENT
Current Full Year NZ$16,510,000; Up 9.6%:Previous Corresponding Full Year
NZ$15,060,000
Total Operating Revenue : $273,157,000
OPERATING SURPLUS BEFORE UNUSUAL ITEMS AND TAX: $24,351,000
Unusual items for separate disclosure : Nil
OPERATING SURPLUS BEFORE TAX : $24,351,000
Less tax on operating profit : $7,841,000
OPERATING SURPLUS AFTER TAX BUT BEFORE MINORITY INTERESTS :$16,510,000
Less minority interests: Nil
Equity earnings: Nil
OPERATING SURPLUS AFTER TAX ATTRIBUTABLE TO MEMBERS OF LISTED ISSUER:
$16,510,000
Extraordinary items after tax attributable to Members of the Listed Issuer:
nil
OPERATING SURPLUS AND EXTRAORDINARY ITEMS AFTER TAX ATTRIBUTABLE TO MEMBERS
OF THE LISTED ISSUER: $16,510,000
Earnings per share : 42.8 cps
Final Dividend : 14 cps
Date Payable: 17/10/05
Imputation tax credit on latest dividend 6.895518 cents
Summary Of Commentary:
Chairman''s Statement
1. Profit Announcement
Michael Hill International has today announced a record tax paid profit of
$16,510,000 for the 12 months ended 30 June 2005, 9.6% up on the previous
year.
Group sales increased by 4.5 % to $271,573,000 (2004 - $259,777,000).
The results for the year represent an excellent 26.8 % return on average
shareholder''s funds (2004 - 28%), a return on average total assets of 13%
(2004 - 13%) and the Board is pleased with the overall result.
Segment Results
As stated in the half year results, the company has redefined its
geographical reporting segments to better reflect the financial performance
of each segment. The segments now reported on reflect the performance of the
company''s retail operations in each segment and exclude non-core retail
activities such as manufacturing, wholesale and distribution, and other
general corporate expenses. The Directors believe this change will better
inform the readers of the financial performance of our geographic segments.
New Zealand Operations
The New Zealand Company performed well with one new store being opened at
Glenfield in Auckland during the year. Revenue increased by 0.2% to
$86,459,000, with operating profit down 0.2% from $9,879,000 to $9,854,000.
Operating profit as a percentage of revenue was steady at 11.4%. Sales
during the second half of the year were down on expectations as the economic
conditions tightened in New Zealand.
Same store sales decreased by 1 % for the 12 months (last year 1.2%
increase).
Total stores operating in New Zealand at 30 June 2005 were 47.
Australian Operations
The Australian Company had a solid year and improved its revenue by 5.4% for
the 12-month period (in NZ dollars) with operating profit up 7.6% from
NZ$16,530,000 to NZ$17,792,000.
In Australian dollars, total sales were up 10.2% to A$161,806,000 and
operating profit up 12.5% to A$16,368,000.
Same store sales improved by 1.6% for the 12 months in Australian dollars.
As with New Zealand, sales during the second half were down on expectations
as economic conditions tightened.
The exchange rate used for the translation of the Australian surplus was .92
(2004 - .88).
During the course of the year, a further ten stores were opened at the
following locations:
Bunbury Forum in West Australia
Casula Mall in Sydney
Bay Village in New South Wales
Maryborough in Queensland
Batemans Bay in New South Wales
Grand Central Toowoomba in Queensland
Parkmore in Melbourne
Raymond Terrace in New South Wales
Mirrabooka Square in Perth
The Pines in Melbo
A strong result in the current environment, albeit I thought they would manage EPS of 44 cents. From the share price reaction I suspect the market agrees although for MHI it tends to voice it's opinion on ever low volumes.
New Zealand is showing its mature development. Still seems to be puff left in Australia albeit rolling out 10 stores doesn't have the same impact it used to with 102 now open.
Canada looks very positive. In 5 years time it will be bigger than the New Zealand operation. Look for a 4th Country opening in 2 to 3 years once Canada is earning.
Fundamentally for me the share price has come back to within 50% of some of my higher DCF values, assuming they can continue to manage something like historic 14% growth rates. Weak technicals continue to keep me out.
Where's the chart?
In the last 6 months MHI has been trading between 7.4 and 7.6.
But the SP has gone on a steep dive below this twice and then shot back up into it's usual range again just as quick.
I have bought on both of these dips and sold soon after, for a small profit.
The SP looks like it might be at the start of another dip.
Is this a recognised TA pattern? If so does it indicate anything?
I don't think it's a 'pattern' per se, but there is something 'interesting' going on. Overall, MHI is trading in a very narrow range. I'm not precisely sure of the mechanics, but looking at the announcements and SSHs there is clearly a buyer in the market, but who appears to be (at this stage) mostly mopping up small sellers. I'm not sure why the price keeps dropping. Perhaps Mr Peters and his associates stop buying, wait for nerves to set in, and when the price really starts falling and there is a row of willing sellers, they swoop[?]. Certainly, the stays static on very thin volume, falls on thin volume, and then rises on large volume. Thus, if the price does drop again, it seems possible that there may be another big buy order. If the buy order doesn't come through, then the price may not rebound. Will you call his bluff?
http://img.photobucket.com/albums/v3...mhi26sep05.gif
MHI is back to where it was a year ago. The current "trading range" is too narrow to trade effectively. Rmbbrave, you are either very skillful or very lucky! I would suggest, though, that if you want to trade short-term like this, there are other stocks more suitable than MHI.
The key to what is going on here lies with Limegreen's observation that the price "falls on thin volume, and then rises on large volume". This is quantified and easily seen in the rising On Balance Volume plot he has included.
This stock is being accumulated by people with more patience than I have!
D'oh! I forgot to mention the OBV (it wasn't there by accident).
As to skillful v. lucky: it really just depends on what you think the odds are of the buyers continuing to push the price back up if it drops. It is a strategy of sorts, but who knows how long it will play out for.
Where's k9 for some observations on his fave stock?
I'm probably just lucky.Quote:
quote:Originally posted by Phaedrus
Rmbbrave, you are either very skillful or very lucky!
MHI's Australian rival ANC has done nothing with its SP either, in fact it has dropped. Were it not for the new stores neither would have grown their sales and revenues. When that is your biggest market and you are regarded as a growth stock, it means MHI better push on to the summit or risk being taken behind the woodshed by the market.
Huge volume again today!
A big drop on small volume followed by a big rise on large volume - and Splitenz reckon history never repeats!
Mine (bought for 7.30) are for sale at 7.50.
Will my "luck" hold for a third time?
If it does, I might have to make a new handle - How about "rmblucky"? Or if I start to suffer from delusions of granduer, "rmbskillful".
Just quietly acknowledge your stock-trading genius to yourself and wait others to recognise it.
if you start blowing your own trumpet we may come up with a new handle of our own for you.
regards
Paper Tiger
PS You is doing good, boy!
Just under half the share I bought for 7.30 have sold just for 7.50 in the first trade of the day for MHI.Quote:
quote:Originally posted by rmbbrave
Huge volume again today!
A big drop on small volume followed by a big rise on large volume - and Splitenz reckon history never repeats!
Mine (bought for 7.30) are for sale at 7.50.
Will my "luck" hold for a third time?
If it does, I might have to make a new handle - How about "rmblucky"? Or if I start to suffer from delusions of granduer, "rmbskillful".
My "luck" is still holding.
Rmbbrave-good on you -but is it worth it for about 3% before broker fees and tax?
I believe he has an "interesting" tax status, which makes 3% in a day or so quite appealing.
My thought on this MHI situation is that others are getting wise to it, so the price is not dropping as much because people are buying in anticipation of it being pulled back up. i.e., each time this strategy has become less profitable
Monday - bought 1400 @ 7.3 - cost 1400*7.30+30 = $10250Quote:
quote:Originally posted by KJ
Rmbbrave-good on you -but is it worth it for about 3% before broker fees and tax?
Thursday - sold 1400 @ 7.5 - income 1400*7.50-30 = $10470
(I don't pay tax on capital gains - I am an overseas resident for tax purposes.)
Profit $220 (after brokerage and tax)
Was it worth it?
You bet! I usually have to work a day (3 hours) to get that much money.
Please tell us what they are.Quote:
quote:Originally posted by Phaedrus
if you want to trade short-term like this, there are other stocks more suitable than MHI.
Not sure being non resident makes a difference but that is for another thread.Quote:
quote:Originally posted by rmbbrave
(I don't pay tax on capital gains - I am an overseas resident for tax purposes.)
Rmbbrave-good for you-did not realise that it would be tax free.
Yes-if you can get a 3 day turnaround cycle that's great.
You could be right.Quote:
quote:Originally posted by CJ
Not sure being non resident makes a difference but that is for another thread.Quote:
quote:Originally posted by rmbbrave
(I don't pay tax on capital gains - I am an overseas resident for tax purposes.)
I pay 2% on dividends and interest so I suppose I should pay 2% on profits from trading in NZ as well. That would be about $4 then.
Sorry for off-subject comment.
2% on div? I thought that was just interest, and that divs had 10-15% witholding tax deducted?
You're right OE Kiwi - kind of.
According to my CEN didvidend statement.
I had 1300 shares and the divie was 10 cps.
So the dividend would be $130. But I also get a supplementary dividend of 1.7647 cps ($22.94) because I am a non-NZ resident - so the Total dividend for tax purposes is $152.94.
This figure is then taxed at 15% ie $22.94 which gives a Net Dividend of $130.
So basically the tax rate was zero.
In conclusion then...
Interest is taxed at 2%
Dividends have no tax
And profits from trading could be 2% or 15% or 0% - who knows?
Interesting. What does the country you are resident in say about your capital gains. I am also not Tax Resident in New Zealand, but my friendly local tax man has the same rules about captial gains, you trade for profit, rather than investment, you pay tax.Quote:
quote:
(I don't pay tax on capital gains - I am an overseas resident for tax purposes.)
Unless you are not telling the of course ;)
Good looking sales figures for the first 1/4 of the year. Aus now provides 3/4 of sales.
NZ same stores up 5.6%
Aus same stores up 5.4%
Can same stores up 13.3%
Tot same stores up 5.7%
NZ all stores up 8.0%
Aus all stores up 13.8%
Can all stores up 88.9%
Tot all stores up 13.8%
Jeweller 'tough enough'
05 November 2005
By GARETH VAUGHAN
Tougher times may be coming, but Michael Hill does not seem worried.
Mr Hill, chairman of jeweller Michael Hill International, told yesterday's annual meeting in Auckland that tougher trading conditions might "sort a few people out".
The company Michael Hill was solid, nimble and mean enough to be able to cope, Mr Hill said.
Furthermore, there could be some benefits as shopping centres might have to review "ridiculous" rental renewals and finding staff might get easier.
"Just keep your shares in that bottom draw. I don't think we'll disappoint you."
Sales in the three months to September rose 13.8 per cent to $56.6 million, with same-store sales up 5.7 per cent.
But trading conditions in Australia, where the jeweller makes 65 per cent of its revenue, had toughened up, chief executive Mike P****ll said. October had been flat.
"We're just not sure where the next quarter will go," he said.
General retailing conditions were deteriorating with high petrol prices hitting consumer confidence, Mr P****ll said. Heading into November and December, when the company makes a big chunk of its profit, "anything" could happen.
Mr Hill said the expansion drive would continue, focusing on "controlled, profitable" growth.
Michael Hill, which began as one jewellery shop in Whangarei in 1979, now comprises 156 stores. Of these, 102 are in Australia, 47 in New Zealand and seven in Canada. More are imminent.
Mr Hill said the company was opening a shop every two weeks and would have 2000 staff by Christmas.
There was potential in Australia for 150, or possibly more than 200 stores. There was also potential for "200-odd" shops in Canada, with the company likely to focus on the oil-rich province of Alberta during 2006 after securing its base in the Vancouver area.
Michael Hill planned to open two stores in New Zealand this year.
The company's shares closed at $7.65, up 5 cents.
NOTE : MHI's chief executive is Mike Par$ell
Thanks for the footnote - I was wondering what the **** was for!
Belg I'm not certain that the impact of a rising gold price is bad for Jewellers but I'd be pretty confident it isn't good.
In any case MHI are a quality company that you must pay a quality price for in order to participate. I'm still not in because the value doesn't quite hit my benchmark hurldes, although I've had a spare cash lying around of late and have been tempted to dribble little buy orders in (the only way to buy a company this thinly traded). Apologies to holders but I'm still waiting out for the day they get hammered by a bad trading quarter...
MHI has moved more or less sideways for a year or more. Over this time there have been a few minor trends and multiple support/resistance levels. MHI would need to breakout above $8.35 to re-establish its old long-term uptrend.
While this is a stock that I would not want to be holding, I do not see it as a good "shorting" prospect either. Look how the OBV continues to rise - this stock is being accumulated, not distributed.
http://h1.ripway.com/Phaedrus/MHI1220001.gif
6 months to December 2005: Australian sales down 2.3% (same store -5.3% in A$). NZ up 1.6% and Canada up 9.9%. Profit forecast to be down $0.7m or so for the half year versus last year.
MHI down almost 8% at time of posting. This could be the bad quarterly news paitent accumulators have been waiting for.
DCF Estimate for MHI: $14'ish
Wait for price below $7 and accumulate on the next uptrend.
Halebop, I'm sure your DCF is far more accurate, but mine only comes in at $6.89....
A good share though, and I agree that it is an accumulate below $7.
Hi Liz,
I guess it all comes down to what parameters you plug in. DCF is always wrong in any case. I always use a 10% cost of capital because my metrics only get me this far into analysis with quality companies but will not go so far as Buffett and use a risk free rate of return - might be something like a $20+ MHI valuation if this was the case...
Depending on the direction of the wind I'll use a termination growth rate of either NIL, the most conservative, or 3%, my long term guesstimate of inflation.
For a quality company with a clear and defined growth path and a history of delivery I'll use something aproximating their growth rate over the last 7 to 10 years. Because MHI fits this bill I'm happy to assume a 14% to 15% growth rate for 10 years with a 3% termination rate. Plug in 10% cost of capital and this derives a $13 to $14 valuation.
While this might be demanding they have a history of delivering these kind of returns while maintaining high dividends to boot. To get a valuation of $6.89 on 10% discount/3% termination rates, growth would be just 5.5% per annum. Using a more conservative 0% termination rate requires 8.2% growth rate to reach the same number. I think both of these are too low but you may be looking ahead less than 10 years as well.
Any number could be correct but I prefer to stick with the known quantities (historical growth rates) than really attempt to auger the future. Quality management tends to continue to be quality management. MHI's goal of opening lots of stores (I think 2,000?) is easy to understand, duplicatable and given time, achievable. Using the 50% margin of error rule means I can only buy if the price is below 50% of valuation anyway. This goes some way towards insulating me from optimistic assumptions of continued outperformance.
Edit: Fixed various illiteracies.
Hi Halebop, Funnily enough (since I developed this spreadsheet back in 1998 I think), I also have 10% rate on everything and mostly use 3% for terminal growth - often, but not always, for everything beyond 5 years. However, my choice of "cashflow" is probably a little different and I also have a funny "fudge factor" which modifies all my DCF's. This is just a historic quirk which seemed to work and bring them all in line with analyst figures - after all, what the analysts tell the institutions its worth is probably going to have more impact in the shorter term than my own calculation!
I guess I find that using 15% growth may turn out to be correct for a company like MHI, but institutional analysts are unlikely to be that courageous, and anything beyond 5 years will more than likely be "normalised" down to less than 5%. Using 15% therefore carries a risk that I might have to wait 5 years for anyone else to notice the company!
Historically, I go for 33% below valuation. I also do a DCF for 1 year out and see how much it changes by - add the % change to the dividend yield and look for total 15% - which, now that I've heard of it, probably gives a similar indicator to using the dividend growth model...
But, as you say, while these things suggest value (and usually work out over timeframes of 3 years or more) the correlation can be less than reliable - particularly at peaks and troughs in the cycle - so now make more allowance for management quality and market sentiment and more willing to buy closer to full value for a company with solid management history.
Hi Belg,
My cashflow estimates sometimes encompass detailed analysis - and often include an exchange rate influence of some kind. But in this case, they are mostly based on a fairly consistent rate of expansion and some limited cyclical behaviour. In this case, I have not attempted to take into account exchange rates to any great extent, given that I would also need to factor in gold (and other commodity) prices and elasticity of demand...... surprisingly, detailed analysis of short-term cashflows is not often worth the effort (there are some exceptions where future profits are a direct result of activity in preceding years).
I know you like opportunistic buying on downward spikes, but re-read Halebops advice...."Wait for price below $7 and accumulate on the next uptrend"
Hi Belg (nice to see you at the "business end" of the forum!),
Pretty much what Liz said. I make no attempt to factor exchange rates with a company like this. There would not be a reliable probability model for it anyway. Intuitively it seems likely the A$ will rise versus the NZ$ but I haven't attempted to model it. Over time exchange rate conversions will become both more complex and less useful in MHIs case as they open in new markets. For now it's "good enough" for me to think the soft Australian results may receive a boost from an improved NZ$ exchange rate conversion but within the context of looking back 10 years and looking forward 10 years they aren't relevent unless you believe some major structural or catastrophic change is due.
Time for Rmb"lucky" to ride again my intrepid traders.Quote:
quote:Originally posted by rmbbrave
In the last 6 months MHI has been trading between 7.4 and 7.6.
But the SP has gone on a steep dive below this twice and then shot back up into it's usual range again just as quick.
I have bought on both of these dips and sold soon after, for a small profit.
The SP looks like it might be at the start of another dip.
Is this a recognised TA pattern? If so does it indicate anything?
Unfortunately tomorrow is not a good day for me to be trading shares as my winter holidays are now at an end and it is back to 3 hours days for yours truly.
After 3 hours of hard slog I then have a dentists appointment at 1:30 Japan time so I will miss most of tomorrow's trading on MHI.
If I am really lucky MHI may wait for me until Thursday - I have the morning off.
Michael Hill sales lose lustre
11.01.06
By Michelle Dacruz
From NZ Herald
Jeweller Michael Hill International issued a profit warning yesterday after a fall in sales in its biggest market, Australia.
The retailer said sales in Australia were down 2.3 per cent in the six months to December. Australian same-store sales - excluding stores opened in the past year - were down 4.3 per cent.
It said net profit in the six months to December was now forecast to be between $10.5 million and $11.5 million.
It had not previously set a forecast for the period, but analysts had expected a first-half net profit of $13 million or more.
Chief executive Mike P****ll said that even though Australian sales had been flat leading up to Christmas, the extent of the slowdown had been a surprise.
"We sensed a tightening of the market in October and November when sales were relatively flat, but the Christmas period was definitely harder than we anticipated," he said.
"Demand was not to the level that we anticipated and there was a lot of competitive activity which put a bit of pressure on margins as well."
With 158 stores catering to mid-range jewellery consumers, Michael Hill generates nearly two-thirds of its revenue from Australia.
While there is anecdotal evidence that holiday retail trading in Australia was softer than expected, Forsyth Barr analyst Guy Hallwright said Michael Hill's warning represented a more significant decline than was probably being seen across the broader retail sector.
Hallwright said Michael Hill's Australian sales were a "a substantial slowdown" compared with early evidence of holiday trading in Australia. "The result is obviously going to be well below what the market expected."
New Zealand sales were up 1.6 per cent and Canadian sales up 9.9 per cent on the earlier period.
The company made a net profit of $12.2 million in the six months to December 2004 but will restate that result based on new international accounting standards.
Did the chart predict the profit warning, he said, sotto voce....
MVT, The chart told me not to have shares in the company 10 months ago. Only the fundamentalists would be holding this stock at this time so let them worry about profit problems. macdunk
Note that P the issuer of said chart stated that it was not a stock he would want to be holding.Quote:
quote:Originally posted by Major von Tempsky
Did the chart predict the profit warning, he said, sotto voce....
Major, you should know by now that charts cannot predict the future. Nothing can. I am heartily sick and tired of trying to get this point through to you. Not only do you fail to understand what charts can't do, you also seem to be totally incapable of appreciating what charts can do. Specifically, with regard to MHI :-
The chart indicated a clear SELL on this stock at +/-$8 OVER A YEAR AGO. (Posted on 3/12/04, page 3 of this thread). Nicely timed eh? Where was your warning? Where was your advice to quit MHI?
11 days later on 14/12/04 I posted the words "With todays close of $7.80, MHI is now in a downtrend" (page 3 of this thread). That's a [u]DOWNTREND </u>MvT, those things it pays to keep out of - Capiche? Again, where was your MHI warning at around this time? (OVER A YEAR AGO) Look at the chart and you will see that [u]more than a year later that same downtrend is still in effect</u>. The 14/12/04 post turned out to be particularly apposite - why don't you read it?
Since that time, MHI has remained in a shallow downtrend and has also encountered resistance at $8.10 or so. (But then you don't "believe" in Support or Resistance do you?) Short-term MHI traders would have exited on the recent trendline break marked with a red arrow. I shouldn't have to point this out to you, but all this was of course well before the drop occasioned by the profit warning.
You see MvT, there is no need to even attempt to predict the future. All you have to do is react appropriately to significant price movements as they occur. This is what charts depict. Not the future. I doubt that you will EVER understand this simple point.
Charts got users out of MHI before the downtrend began. (See page 3)
Charts got users out of MHI before the meltdown.
That's all charts can do.
That's all charts need to do.
Get it?
Probably not!
http://h1.ripway.com/Phaedrus/MHI111001.gif
Wasting your breath P.
To be fair Phaedrus, this would be a difficult stock to exit and enter on trendline breaks in any significant volumes, because the volumes traded are often quite low. The dip in early 2005 made me nervous enough to get out at prices of $8.05-$8.14 in April, but even with my relatively small holding, it had to be a well-timed sell order...
To be really fair it is hard to sell shares in a good company. Pheadrus has his trend lines i have my time line run from my stop loss level. I would probabely have had a 15 pc trailing stop loss running on this one with a 20pc pa time line from that point. I cant be bothered to work it out as i am not an investor in MHI but that is what i would have done. I normally start with a 5pc stop loss then relax it in a steep trend when i buy my second lot. When a share goes sideways its nearly as bad as going down. You must also take into account dividends with your stop loss decisions. macdunkQuote:
quote:Originally posted by Lizard
To be fair Phaedrus, this would be a difficult stock to exit and enter on trendline breaks in any significant volumes, because the volumes traded are often quite low. The dip in early 2005 made me nervous enough to get out at prices of $8.05-$8.14 in April, but even with my relatively small holding, it had to be a well-timed sell order...
Not all fundamentalists Macdunk. Here is what I wrote on sharechat in the latter half of 2004.Quote:
quote:Originally posted by duncan macgregor
MVT, The chart told me not to have shares in the company 10 months ago. Only the fundamentalists would be holding this stock at this time so let them worry about profit problems. macdunk
--------
In assessing the 'terminal value' of the company at the end of my valuation period, I have used the average P/E over the last eight years, which works out at 13.1. Note that both of these figures have gone up since we first started following MHI
The expected compounding rate of return on this share works out to be 4.4%. This is below the rate of return you would expect from government stock, which makes the added risk of holding a share to obtain this income stream not worth it.
The company of course is still fundamentally excellent. But Mr Market has priced the shares so high that MHI are going to have to roll out stores significantly faster than they have in the past - and profitably, to meet the expectations of Mr Market. If Warren owned this share he would be selling his holding while the price remained so far above fair value.
--------
I would have been out at $7.86, at a very similar price point to Phaedrus based on his charting.
SNOOPY
Being "nice" MacDunk, and assuming you'd been smart enough to buy in mid-2003 at $4.20, then (not allowing for divis), your timeline would not kick you out until below about $6.62 at this point...
The TA's are out. The FA's are out and, right now, you are losing... [}:)];)
Just like his geography teacher was.Quote:
quote:Originally posted by Gryffyn
Wasting your breath P.
Liz, sorry to diss apoint you try and twist it in a different way next time. macdunkQuote:
quote:Originally posted by duncan macgregor
MVT, The chart told me not to have shares in the company 10 months ago. Only the fundamentalists would be holding this stock at this time so let them worry about profit problems. macdunk
No Xmas jingle for jewellery retailer
11 January 2006
By GARETH VAUGHAN
Jewellery retailer Michael Hill International is warning profit for the second half of 2005 will fall well below analysts' forecasts because of lower Christmas sales and tighter margins in Australia than it expected.
Same-store sales in Australia were down 5.3 per cent from the 2004 December quarter, the company said yesterday.
Michael Hill earns about 65 per cent of its revenue in Australia.
The company's shares fell 60c, or 7.7 per cent, to $7.20 yesterday though only 62,400 shares were traded.
"Where we really got knocked around in the Australian business was December," chief executive Mike P****ll said. "Most of the retailers here (Australia) went on sale early so it was a double combination of difficult sales and a slight squeeze on margins."
Michael Hill expected between $10.5 million and $11.5 million profit for the six months to December 31 - down from $12.2 million in the same period of 2004.
The 2004 figure will be restated to conform with International Financial Reporting Standards, which Michael Hill adopted last July. Full results will be made public on February 16.
Though the company had not previously given a second-half forecast, yesterday's guidance is well below expectations for profit between $13 million and $13.5 million.
"Basically we just looked at the consensus forecasts of the analysts and we're going to come up short of that so we felt we had to put a statement out," Mr P****ll said.
"When we look back internally in our business there's nothing we really feel we could have done a hell of a lot better."
Forsyth Barr analyst Guy Hallwright had been anticipating more than $13 million profit for the company. He was surprised at how far Michael Hill's Australian same-store sales fell and suggested the jeweller might have got its promotional activity wrong.
More broadly, Australian retail sales fell 0.1 per cent in November versus expectations for a 0.3 per cent rise. Mr Hallwright said there was also talk of a "fairly soft" December.
Rival Australian jewellers are yet to report Christmas sales.
Michael Hill's New Zealand sales rose 1.6 per cent during the six months, and sales at the company's fledgling Canadian operations gained 9.9 per cent. However, Australian sales fell 2.3 per cent. Mr P****ll said the New Zealand business traded satisfactorily through December with margins holding up.
Warren Couillault, chief investment officer at Fisher Funds, which holds 10.79 per cent of Michael Hill, described the profit warning as a "short-term aberration" caused by difficult Christmas trading. He said the solid Canadian growth was important.
"That's where any shareholder would be looking for the company to achieve positives because that's where their whole future is - growing in another market," Mr Couillault said.
Mr P****ll was cautious about trading prospects in 2006. He said it was too early to tell how the business would perform.
"I don't think it's going to be buoyant, put it that way," he said.
Did I twist it MacDunk? No offence, but I'm not sure how... Snoopy and Phaedrus were giving their views on a theoretical basis and, as you mentioned your timeline method, I thought it would be interesting to see how it stacked up.
You suggest your "timeline" method but then say you wouldn't have been holding due to the chart - yet, by my calculation, your timeline method would still have had you holding. So I am confused as to how you can have it both ways.
I note you were happy enough to assert that fundamentalists would still be holding without providing evidence as to why (and in fact, from this forum, it appears many aren't).
Cheers, Liz
LIZ, when a share goes sideways i am out. I really havent followed MHI its not in my buy program. I have not worked out what my buy or sell would be so perhaps you might enlighten me.
I buy a share with a a 5pc stoploss. when it proves its self, i buy a second helping and ease the stop loss. I stated that a share in a steep uptrend my trailing stop loss might ease to 15pc. My time line is taken from my stop loss level at a 20pc rise plus dividends pa. The fundamentalists are still holding because it is A good sound company nothing has changed. perhaps you might tell me with my system where i bought and when then i sold and why. My buy program is based on straight fundamental analysis. macdunk
discl nil so far
MacDunk, I thought I had already done what you ask by giving you a buy price of $4.20 in mid-2003 and calculating your timeline net of dividends to be at $6.62. Maybe $4.20 was a little premature seeing as you would hardly have called it a steep uptrend at that point. So I will let you have my buy price of $4.70 near the beginning of 2004 (rough estimate - I can't remember if this is exact and too lazy to look it up). After two years at 20% (excluding dividends), that would put your timeline at $6.76. I don't think even the sharp spike down in early 2005 would have hit your timeline, given that the timeline would have been at a lower point then.
I disagree with your take on fundamentalists. They consider more than whether it is a good company. They also consider whether the price has become overvalued and whether the economic outlook is favourable. In MHI case, I was selling in April 2005 because the company carried the significant risk associated with a substantially higher P/E than other retailers and was exposed to an increased chance of a retail slowdown in Australia (with potential for a follow-on slow-down in NZ). The spike down in early 2005 demonstrated the risk of this share falling sharply on bad news due to low liquidity, so I decided to take the cautious option and exited when it gave me a second chance...
LIZ, if you follow the sp price up with a trailing stop loss as i stated you will find that the stop loss or the time line would have you out very close to pheadrus sell signal. With my system it works of a trailing stop loss not a rigid start figure. the time line is taken from the latest stop loss figure which only rises never drops. Do the sums again and tell me what i might have made. macdunk
Fair enough MacDunk. To be honest, I've never run a stop loss, so it is probably easier for you to work this out than me. If you rode it to the peak at approx $8.30, then (assuming I understand correctly), I make your stop loss at 15% below this price to be about $7.05. Your time line would run up from there and have been fairly quickly intercepted and you might have sold at a price slightly above this in Jan 2005 - or that might have just slipped past the line in which case you wouldn't have had your trigger till the big spike down in March - the fall then was so sharp, you probably would have had trouble selling any significant volume on the way down to $6.60.
Apologies if I've misunderstood your method further - I don't want to drag this argument out. If you would have sold around the $8 mark as you say, then fine. For once, all our various methods were in agreement.
But I didn't think your casual claim to superiority over those using fundamental analysis could go unchallenged...
Cheers, Liz
Brokers cut Michael Hill forecasts
12 January 2006
By GARETH VAUGHAN
Brokers have taken their red pens to profit forecasts for Michael Hill International, helping bring a two-day fall in the jeweller's share price to almost 12 per cent.
Michael Hill shares fell 30 cents, or 4 per cent, to $6.90 yesterday. That follows Tuesday's 7.7 per cent drop after the company warned its interim profit would be up to $3 million below analysts' forecasts.
Forsyth Barr analyst Guy Hallwright said he had cut his 2006 and 2007 profit forecasts by about 16 per cent. Mr Hallwright now expects Michael Hill to post $15.8 million profit this year, down from $16.5 million last year, and a forecast of $18.5 million next year.
ABN Amro cut its 2006 forecast by 20 per cent to $15.3 million. Macquarie Equities analyst Warren Doak is now expecting an $11 million first-half profit, down from $12.5 million, and an annual figure of $15 million.
On Tuesday, Michael Hill said its first-half profit would be $10.5 million to $11.5 million. This was lower than analysts' consensus forecasts of about $13 million because of lower Christmas sales and tighter-than-expected margins in Australia, where it makes about 65 per cent of its revenue. December quarter same-store sales in Australia fell 5.3 per cent.
Mr Doak said Michael Hill was in a sector that was becoming increasingly competitive. It was also sensitive to changes in discretionary consumer spending. Evidence suggested consumers had favoured items such as iPods and video players rather than jewellery this Christmas.
"Certainly the iPod was the wow-factor item for the 2005 Christmas period," Mr Doak said.
Mr Hallwright said the extent to which Michael Hill's lowered profit outlook was related to the company's adoption of International Financial Reporting Standards would not be clear till it reports interim results on February 16.
Up 5 today. Meow ;)
Oh no oh no the sky is falling and jewellery is never to be worn again...blah blah...panic ....sell...sell.
Meanwhile I took a nibble yesterday at 690 to add to my holding and will move on to the next stock that is at discount next week.
Ah don't you just love the short-termism of the market.
DB - I think I'd wait for the mewling to stop.
Rmb"lucky" rides again!
I have put in an order for 2000 MHI @ 6.95 ...
... And have secured 1511 so far.
Will Rmb"lucky"'s luck hold?
We'll see ...
Dead cat bounce.
Exactly!Quote:
quote:Originally posted by k1w1
Dead cat bounce.
I'm hoping to sell soon for a small profit
MHI has proved their quality in a tough operating environment. But for an accounting change which transfers $700,000 in costs from the 2nd half to the 1st, their profit would be unchanged from the same period last year. The 6% rise in revenue compared favourably with ANC's 6.6% sales decline. Sales were assisted by a steady increase in Australian store numbers (but per store sales were down 2.4% in a softer trading environment) and a continued roll out of Canadian units. Canada scored a maiden operating profit at a modest $200,000. The rapid increase in scale and improvement in profitability bodes well for future years. I wouldn't be surprised if we saw MHI open in a 4th market within 3, maybe even 2 years.
By my metrics it's currently priced for 5% growth (EPS 39c, Growth 5% falling to to 3% after 10 years, Discount Rate 10%). At a historical 14% growth rate NPV is around $13. So in the mid six $s MHI is a bargain but I'll be awaiting a clear up-trend signal before buying.
I wonder what the US market would be like for MHI. It shouldn't be too hard for them to pop over the border if they want to. It might even be easier to keep their business on the west coast of Can/US than it would be to open shops on the east coast of Canada.
I agree although moving across Canada could be useful in the long term because it would prod them to develop French speaking systems and processes. This could facilitate them entering France.
That's some bounce - right up to 7.60.Quote:
quote:Originally posted by k1w1
Dead cat bounce.
... I never sold the 2000 I bought in the middle of Jan and now they're up to 7.60.Quote:
quote:Originally posted by rmbbrave
Rmb"lucky" rides again!
I have put in an order for 2000 MHI @ 6.95 ...
... And have secured 1511 so far.
Will Rmb"lucky"'s luck hold?
We'll see ...
Still lucky.
Yes, I'm regretting not buying around $7 but I hadn't the spare cash, and couldn't decide what I would rather sell to fund it.
Strange how MHI always lags behind the NZX. Then it plays catch up.
In a very strangely worded announcement, Australian listed Jeweller Angus & Cootes (Holdings) Ltd announced they wouldn't be making any money for the year. (Actually they said the profit would be "below breakeven").
First half profits were soft, down 37% to $6.1m. This implies a horrific 2nd half result.
Awaiting the next MHI trading update with interest.
MHI has dropped down to 7.15.
Has a half year result been released.
I have had good result trading MHI every 6 months or so.
Is it time for another trade?
Spose no regrets now StephQuote:
quote:Originally posted by stephen
Yes, I'm regretting not buying around $7 but I hadn't the spare cash, and couldn't decide what I would rather sell to fund it.
What do you think of the result Belg ... bit disapoointing ... even though expected
Great company and all that and knows about what it is on about
But not a good investment over the last two years .... share price gone nowhere .... as the highly inflated pe ratio back late 2004 gats unwound to more respectable levels
On this earnings still a pe of 17 so shareprice unlikely to go anywhere for a while yet ... in this cycle anyway
Looks like MHI stays on the watchlist ... and review in a years time.
Can't you see W69...Belgs Laughing...all the way to the funny farm.Quote:
quote:Originally posted by belgarion
Those who didn't pick up below $7 - Why not?
Those who still didn't pick up between $7 and $7.50 - Why not?
Those still not looking for a few more - Why not?
Those who haven't got a clue what Im talking about should whack current fx-rates into their spreadsheets.
discl: laughing ;)
BTW...love the line on the "spreadsheet" Belg.
Looking forwards to seeing the full results in detail. It was reasonably apparant results would be flat'ish. Secretly I thought they might sqeak an increase but hadn't factored a "same sized" loss from the Canadian operation. Despite the flat numbers the qualitative differences between MHI and ANC are highly apparent. Wonder how the privately owned Prouds are doing?
Last time MHI delivered a flat result a few years back the market got morose about them and the share price suffered for a year or so. I'd expect the same this time round and like W69 will keep them on the medium term radar. Canada still seems on track and I'm reminded how long it took Australia to really start firing. Quite a few store openings in OZ this soft trading year, probably didn't help the short term bottom line.
On a logarithmic scale it does!
What does a 15 year graph with an ordinary scale look like?
Pheadrus,
good work and $6 here we come !?
So an optimist could say that ...
MHI is a long way from breaking the long term uptrend that started way back in 1998.
Yeah I think 1998 is the better reference, there weren't any "higher highs" from the brief 1991-92 NZ market boom all the way to the end of 1998 ('Course the mid 90s were characterized by a tough price war in Australia and the receivership of Prouds).
Yes, an optimist might say that, and continue holding. But a realist would observe the 2 year sequence of lower highs and say "MHI has been a wonderful growth stock in the past, but it has gone nowhere for over 2 years now. I am so glad that I acted on the SELL signal that was posted back in 2004 on page 3 of this thread".
This break of the long-term trendline is no more and no less than the confirmation of other, shorter term trendline breaks. There is now only one warning left should MHI continue to show technical weakness - a break below the previous support at $6.60. What would an optimist say then?
http://h1.ripway.com/Phaedrus/MHIS830001.gif
Personally I felt the first break was enough to stay out of the share. While I have a lot of respect for MHIs performance, particularly when benchmarked against competitors like ANC, I prefer to love the company rather than love the share. If anyone wants to own MHI, there will be plenty of upside left after they have bottomed out. My pick would be somewhere in the 6's but with uncertain interest rate and inflation considerations, who knows?
Quote:
quote:Originally posted by belgarion
Those who didn't pick up below $7 - Why not?
Those who still didn't pick up between $7 and $7.50 - Why not?
Those still not looking for a few more - Why not?
Those who haven't got a clue what Im talking about should whack current fx-rates into their spreadsheets.
discl: laughing ;)
:D:D:D
as soon as it goes down...
voila!!!
Belg has been a net seller for 18 months
that spreadsheet is about to blow
ROTFLMAO:D:D:D:D:D
Whoa! Did I read that correctly? If you're admitting to selling while ramping then I think that is incredibly unethical...!!!Quote:
quote:Originally posted by belgarion
Over the last 18 months I've been an 'unenthusiastic' net seller. (And I've taken advantage of the MHI 'reputation' and indulged in some bounce-back trading. And ramped it here too.)
Posted - 06/02/2005 - At the time when he bought, I think I said ... "buy when management buy?" ... there was little responseQuote:
quote:Originally posted by belgarion
Over the last 18 months I've been an 'unenthusiastic' net seller.
Posted - 05/10/2005 - Hope y'all been soaking up the sellers ... I have ... One notes that L.W.P. is stilling buying and the Super has increased their (our?) stake.
Posted - 07/10/2005 - More insiders buying ...
Posted - 15/11/2005 - Almost zero trade for ages.Depth shows buyers but no sellers. And has done for weeks.And today L.W.P picks up more on the biggest trades for ages.A good sign? I hope so.
discl: one of my bigger holdings.
Originally posted by Phaedrus "Look how the OBV continues to rise - this stock is being accumulated, not distributed."
Posted - 21/12/2005 - Very true ...;)
Posted - 10/01/2006 - Under $7.00 works very well for me but I'll take any short-term bottom that presents itself to top up. As you both point out; MHI delivers!
Still, I feel tomorrow could well be unpleasant given that this announce came late in the day and caught many, including me, by supprize. This investor will be looking to buy more though
Posted - 11/01/2006 - Pathetic volume ... just two bids @ 680 and 660 ... Hm ... Time for a cheaky bid ... Ah but how cheaky?:D
Posted - 11/01/2006 - The FA's would now be looking to re-build. Bigger sellers, (with weaker stomachs or foriegn investors looking to get out while the NZD is high), will appear. (At least I hope so )
It ain't all over folks;)
Posted - 13/01/2006 - rmb ... I think you may be moving a bit to early if you just want 2000 shares. That said, if the objective, like mine is 're-stocking', then, IMHO, its a good start;)
Posted - 18/02/2006 - My buying policy given the thin trade is just to pick a point in the downtrend, buy all the time and stop when my original entry point is reached.
Posted - 13/03/2006 - Sooner or later the NZ market is going to cotton onto MHI's value in the event of the NZD going from 70c to 64 against the USD and 93c to 87c against the AUD ... But then, what do I know.
Posted - 23/03/2006 - Those who didn't pick up below $7 - Why not?
Those who still didn't pick up between $7 and $7.50 - Why not?
Those still not looking for a few more - Why not?
Those who haven't got a clue what Im talking about should whack current fx-rates into their spreadsheets.
discl: laughing
Posted - 05/04/2006 - Officers all topping up.;)
Above is Belgarions string of posts over the last 18 months in MHI...wow what a bull, buy buy buy, wink wink wink
Now, yes now;) he comes out with hey look! I've been an UNENTHUSIASTIC net seller over the last 18 months[:o)] Yes unenthusiastic...I would hate to be in a small room with this maniac when he gets enthusiastic, maybe that eye tick gets worse;););)
I think you have forgotten to cover your tracks Belg...
Do you lie to your friends and family as well?...silly Q don't answer
.... which means he has prob been a net seller of feltex as well .... but still has heaps
We have been sucked in pennywise.... i really feel so foolish now
yeah me too:(, I had so much trust in this guy, followed him down the garden path for 18 months
he's fleeced me
I want a govt. enquiry:D
I have had a pretty good run buying MHI on dips and selling for a profit but I am just a leettle bit worried this time around.
Disc: Bought last week at 7.17
Ouch?!Quote:
quote:Originally posted by Phaedrus
Yes, an optimist might say that, and continue holding. But a realist would observe the 2 year sequence of lower highs and say "MHI has been a wonderful growth stock in the past, but it has gone nowhere for over 2 years now. I am so glad that I acted on the SELL signal that was posted back in 2004 on page 3 of this thread".
This break of the long-term trendline is no more and no less than the confirmation of other, shorter term trendline breaks. There is now only one warning left should MHI continue to show technical weakness - a break below the previous support at $6.60. What would an optimist say then?
rmbbrave, I'm curious - why, specifically, did you buy MHI, when it has been in a short-term downtrend for a month and a medium-term downtrend for 2 years?
For fun Phaedrus!
For any other poster I wouldn't bother but here is my trading history of MHI.
Bought 7.30 Feb 2005
Sold 7.99 - 8.02 March 2005
Bought 7.61 June 2005
Bought 7.12 Aug 2005
Sold 7.50 Sept 2005
Bought 7.30 Sept 2005
Sold 7.50 Sept 2005
Bought Jan 2006 6.95
Dividend 9cps
Sold Apr 2006 7.39
Bought Aug 2006 7.17
Currently an owner of MHI.
MHI seems to have very short term dips of the SP which then shoots back up to 7.50.
Who knows how long this pattern will last but we'll find out soon enough, I s'pose.
droll...'amusing in an odd way; whimsically humorous; waggish'Quote:
quote:Originally posted by belgarion
Very droll.Quote:
quote:Originally posted by winner69
[brWe have been sucked in pennywise.... i really feel so foolish now
yes very amusing...thought the very same thing of your MHI net selling claim...that mirror is looking well polished Belgor...good boy
PS LOVE IT!!! ..absolutely love the non response to your string of rampant BUY calls on MHI...very very satisfying[^]
Belg,
I would say that, based on Pennywises research,you will need to explain your "ramping" posts whilst apparently being a net seller or suffer damage to your reputation as an ethical poster on this site.
Please explain.
"reputation as an ethical poster"
Kiwi, pllleeaseeeeee
this guy 'preaches' ethical only...reputation...bafaarharaarahafaa, too funny. have you read his drunk ravings last night in off topic...oh yeah, he's got a reputation...everyone is calling him a drunk.
we have been outing him for years for the hell of it
:D
See Phaedrus,Quote:
quote:Originally posted by Phaedrus
rmbbrave, I'm curious - why, specifically, did you buy MHI, when it has been in a short-term downtrend for a month and a medium-term downtrend for 2 years?
Nothing to worry about - closed today at 7.20.
I bought at 7.17, perhaps a little early but it's okay.
Anyone else like the annoucement. I thought it was positive. Big jump in sales in Canada, Good jump in OZ and an ok rise in NZ. The pressure on margins from higher gold prices will be easing with the drop in the spot gold price and I think it looks good going ahead. The Canada operation must be profitable by now and the rollout there can probally take care of its self. Looks as though Canada will have a similar number of stores to NZ in just a few more years. The best news was the Jump in same store sales in both OZ and Canada meaning they are getting the format right. How about an expension into the UK next.
Possible triple bottom at 680 with spikes to 660, RSI divergence, top of range 720 or resistance at 780. May be worth a look.
See also comments on PGC and RBD threads.
George
George-may be better to wait for a clear reversal and buy into an uptrend.Sentiment not good for this stock-3 mths comments points to NPAT being lower than last yr-could go lower.