The cash generator is running in low gear
Last year Free Cash Flow $47m -- this year $28m
Printable View
The cash generator is running in low gear
Last year Free Cash Flow $47m -- this year $28m
declining margins a worry , when all other retailers like bgp and whs increasing margins
Maybe Waltzingman correct after all …HLG showing all the signs of a cyclical …company and stock
How can you compare margins when BGP is a house hold retailer, WHS is a 2nd grade Dept store at best and HLG is clothing end of story. Its like chalk and cheese. No I am not a holder.
Exactly Greekwatchdog HLG margins may be worse than WHS or BGP (I haven't looked into this recently) and a lot less than KMD.
BUT stock turn is the highest of all retailers in NZ. WHY? because HLG is fast fashion.
RoE is astronomical with HLG, they pay almost all NP as dividends and still grow earnings.
Current price is about fair in my view for a growing but cyclical company with no moat that is executing very well.
Well BGP must be making excess margins Bull considering there is always up to 50% sale every week. Either that or the the items they sell are as cheap as chips. I get emails from Rebel daily telling me 25% off. brand or 10% off this. Commerce commission needs to check these guys just like they did the supermarkets.
I disagree and have looked at this before. HLG holds just $27m inventory against sales last year of $350m. (Just take a moment and soak those numbers in). The stock turn is just on 6 which is remarkable and because of that they are more exposed to a just in time seasonal inventory management system and the consequential air freight costs during Covid that go with that.
Like I have been saying for a while now, fair value is $7 and a good hold as a moderate part of a well diversified portfolio at that price.
10% divergence either side of $7 would see me taking the appropriate action otherwise I'm going to :sleep:
NO div till later on... WHS was the go after all.
Champers to MR B.
Pleased played this one as if it was still very volatile.
Perhaps a play later on.