Category: Technical Picks
Well it is very important to look at the momentum, price action and volume weighted average price of a stock other than fundamental screeners.
This is what our team has come up with another important feature for selecting the stocks on the basis of more than 10 technical screeners, which can help our investors & members to look for short term positional investing, short term trading and identifying the long term price action trends of their favourite stocks.
Business Strategy and Outlook:
Material inflation is occurring in the home appliances category and presents both upside and downside risk to earnings. Management estimates prices for appliances, representing most sales at The Good Guys on estimate, have risen on average by about 8%. Higher average unit prices could bolster revenues in the second half, even if sales volumes decline as expected. However, relatively high inflation in relation to growth in consumers disposable income could weaken demand further, offsetting the positive impact. Management hasn’t yet observed any unusually high inflation in consumer electronics, the key category at JB Hi-Fi stores.
Higher online sales penetration and robust in-store sales at stand-alone stores offset the drop-in footfall to JB Hi-Fi’s mall stores. Low-single-digit group sales growth held up at similar levels to the December quarter-though continue to forecast a decline in the second half and sales decreasing by 3% in fiscal 2022.
Financial Strength:
A 2% decline in group sales and AUD 288 million in net profit after tax were pre-announced in January 2022. However, a surprise off-market buyback perhaps explains a 5% uptick in the shares following the release. JB Hi-Fi is returning AUD 250 million in funds via the buyback, following two strong years of trading which has resulted in an under-geared balance sheet and significant franking credits. The buyback price will be between 8% and 14% below the five-day volume-weighted average price, or VWAP, to April 8, 2022. A capital component of AUD 3.18 per share will be paid, with the remainder in the form of a fully franked dividend. At AUD 43.00 analysts estimate JB Hi-Fi will buy back 5.8 million shares or 5% of currently issued capital. While the expected buyback price is lower than current share prices, Australian taxpayers who have a low marginal tax rate could benefit materially from participating versus selling shares on market.
JB Hi-Fi declared a fully franked dividend of AUD 1.63 per share, representing a 65% payout ratio of first-half underlying earnings.
Company Profile:
JB Hi-Fi Limited is a specialty retailer of branded home entertainment products. The group’s products particularly focus on consumer electronics, electrical goods, and white goods through its JB Hi-Fi, JB Hi-Fi Home, and The Good Guys stores. The company primarily operates from stand-alone destination sites and shopping centre locations in Australia and New Zealand, but the online platform is becoming increasingly important.
(Source: Morningstar)
General Advice Warning
Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.