Quantcast
Channel: Value Analysis » winning stocks
Viewing all articles
Browse latest Browse all 5

Is JB HiFi going to do a “Steve Bradbury”?

0
0

Steve Bradbury was an Australian short track speed ice skater who won the 1000 metre event at the 2002 Winter Olympics when all of his opponents crashed at the last corner.

He only made the final after finishing third in the quarter finals, when the defending world champion was disqualified from the final. His tactic during the final was to cruise behind his opponents, and hope they crashed, as they would be taking greater risks to try to win, and he reasoned that they could crash.

It appears that JB HiFi’s competitors are also crashing, with recent news that Retravision Southern may slide into administration. Retravision Southern is the buyer and marketing company for 99 privately owned Victorian and Tasmanian Retravision stores.

Just last week Game Australia went into administration, following its UK parent. The company has 92 stores around the country.

With Woolworths (ASX: WOW) jettisoning its Dick Smith Electronics arm, Myer Holdings (ASX:MYR) reducing its electronic product lines and Harvey Norman (ASX:HVN) struggling, JB HiFi could end up being the last man standing, at least in terms of consumer electronics.

This is all good news for JB HiFi, and with the Australian dollar falling to below parity against the US dollar, that’s a bonus. All those on-line purchases just got a little bit more expensive.

While the company will struggle in the short-term due to weak consumer spending and heavy discounting of products by failing stores — with competitors falling like flies, the medium to long-term looks much better for Jb HiFi. Trading on a trailing P/E of 9.2 and paying a fully franked dividend of 8.5%, it looks attractive.

Disclosure: I own shares in JB HiFi.



Viewing all articles
Browse latest Browse all 5

Latest Images

Trending Articles





Latest Images