Haha what they say, every dog has its day :p
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MHJ has a pathetic stock turn - its only 1.2 times ……says that ring sits in the shop for almost a year before anybody falls in love with it anfd buys it
Every $ of stock generates $1.99 Gross Margin ..... Lovista generates $8.00 Gross Margin for each $ of stock
Who has the best return on inventory? The one who is much more highly regarded by the market I'd say
I think you will find it is 3 times. Still low.
Big difference is a LOV engagement ring costs $45 and a MHJ costs $14,500
Probably no difference most people can tell lol
The one time I stepped into a MHJ store a few years ago to have a look at their watch selection, (my Gold Seiko watch that had kept perfect time for more than 30 years was looking a bit worse for wear and tear) all they sold was house brand MHJ mens watches. Why would you take a chance on a house brand when you know a brand that's tried true and tested over time to work perfectly ?
I posted that observation on here quite some time back. Maybe the "rocket scientists" in charge of brand selection read it ? Things are looking up for MHJ shareholders because it would seem they have "seen the light" https://www.michaelhill.co.nz/watche...?ref=quicklink
1.2 times stock turn is a shocker though and that 5 year comparative share price performance with LOV was very interesting. No wonder Kw has been in love with LOV :)
I continue to believe people's tendency to behave like magpie's and collect shiny things to make themselves feel better during Covid will wane in due course when they don't have so much need for retail therapy medication.
P.S. I purchased a new Seiko gold watch from a proper Jewellery store that had a wide selection of the world's leading brands...something I note MHJ still doesn't have. Hmmm
Lets hope people have been permanently changed by covid.
I wouldn't assume these guys don't know what they are doing.
The highlighted part of your post was originally one of the main reasons I bought into MHJ awhile back. It was a very simplistic investment theory- due to covid a big chunk of money spent on travel would transfer to other extravagant items- jewellery being one. So far it's paid off in diamonds. MHJ is up 42% ytd.
I reckon there is still runway to this theory. At least for the rest of FY22. Canada showed nearly 20% rebound in sales coming out of lockdown and I expect the same or more from NZ and AUS. Just in time for a potentially record setting Christmas trading period.
As per market screener FY22 eps will come in at au$.011, the analysts were wrong last year by 10% and have recently upped their est from $40m to $41.4m, so it is conservative in my opinion. That puts MHJ on a forward P/E of 9.51. $70m cash in the bank... cant see much downside here.
GP margins are still going up as per Q1 update, could be close to 65%. No worries about freight costs. Doesnt cost much to air freight a diamond ring or gold necklace.
One can only wonder where a new normal dividend policy will land. But potentially we could see yields of 7-10% in the coming years.
MHJ have consistently produced sales of over $550m even after closing nearly 50 stores since 2017.
Online sales and branded sales increasing each year.
Everything is pointing in the right direction for me to continue to hold. If I was to share one concern it would be how much the govt subsidies are boosting profit vs replacing profit. hmmm time will tell.
Disc. Sold some at $1 to buy into the ARV placement. But still my no1 top holding.
PS. Beagle you should have bought a smart watch you old dog :p
"Beagle you should have bought a smart watch you old dog"
i keep getting shanghaied by a little whatch shop in den haag every time i do the Mauritshuis.
you walk from the train station past all those beer cafes and after a drink that lovely little whatch shop gets me every time.
know its only a matter of time.
nothing like the real thing.
Share price not kicking on as it should be
Update excitement over ….share price probably drift back below $1 now ..bugger
I know you don't believe that W69. Slap a forward P/E of 10 on it and let's settle for a $1.15 sp while we wait to see how the x-mas trading goes for Aus/NZ coming out of lockdown.
Then when the trading update comes confirming that it was record x-mas trading for the company and profits will be at least on par with last year i.e. AU$45m. The market must finally re-rate them with a forward P/E of 13 and we land at $1.60 sp sometime next year :cool:
You're being far too bearish W69. Who knows what normalised earnings are?
One thing I do know is you cannot simply take $15m subsidies off last years NPAT figure and arrive at $30m.
MHJ in the past have made more than $30m when doing $550m+ revenue and that's on worse margins.
Analyst's say about $40m npat for the next 3 years.
ASM tomorrow, be interesting to get further updates and hopefully another bump to sp.
Sales seem very strong given the amount of time in lockdown winner
Did anything good come from the Q&A? Wasn't able to listen in.