Forum Archive Index - January 2001

["Malcolm Cameron" <malharcameron@hotmail.com>]

regards to peter & warner
from malcolm cameron malharcameron@hotmail.com
a kiwi living in queensland from personal observations the warehouse has a 
very long way to go here i thought the purchase should have negative share 
price impact in the short term from personal observations I think the entry 
point would have to be below nz$4.50 or the time frame plus 5years
disclosure i have a large portfolio and i have never owned warehouse shares

>From: "Peter Maiden" <pmaiden@xtra.co.nz>
>Reply-To: sharechat@sharechat.co.nz
>To: <sharechat@sharechat.co.nz>
>Subject: Re: Re: [sharechat] The Peoples Pick - outperforming the market 
>.....and WHS
>Date: Fri, 19 Jan 2001 12:03:23 +1300
>
>Hi Warner - thanks for the feedback
>
>The closing prices on 12/1 for the peoples picks were
>
>FFS   35 - I am using only FFS assuming that there will be little 
>difference between FFS and FFSPA over time
>TEL   508
>ITC   17.3
>FRU   183
>THL   184
>
>Good entry points for all but FFS (the heaviest weighted share of the five)
>
>Another subject - still looking at getting into WHS sometime? The market is 
>getting uneasy - isn't it?
>
>I couldn't work out why it got to 670 odd so quickly in December - maybe 
>everybody was reading my posts?
>
>Overall retail sales volumes are still increasing and value has been helped 
>by price rises. No doubt margins have been squeezed a bit but I am 
>confident that in WHS case they have managed these well.
>
>The way the WHS price is going down the last few days you can bet your 
>bottom dollar that the market is not going to be happy with whatever sales 
>growth they report - both for NZ and Australia.
>
>Australia retail scene is quite interesting. Coles Meyer seem to be used as 
>a benchmark and they have a had a terrible time lately. Their biggest 
>problem is where they are positioned in the market.
>
>Where they are missing out is at the top end. They have finally realised 
>that approx 20% of income earners in Australia earn more than A$105K - 
>(from memory top 10% of NZ income earners earn NZ$70K or more) - and these 
>20% account for 40% of total retail sales. Coles Meyer are very weak in 
>this area.
>
>At the other end of the scale it has been estimated that bargain stores 
>(even seen a Price Bashers in Sydney) sales are nearly $15B annually. and 
>growing fast. Interesting that Woolworths operate some of these 'Price 
>Basher' stores - and Woolworths is the darling of the Australia retail 
>sector on the ASX.
>
>Where Coles Meyer are struggling is that they are neither strong at the top 
>end or (unless you count Target) at the bottom end.
>
>Much the same that is happening to Farmers/Deka in NZ. They will always 
>struggle where they are currently positioned and once again they are 
>refocusing their efforts on the upper end - leaving even more for WHS to 
>take at the middle to bottom end.
>
>Those income levels mentioned above shows why ongoing success and growth 
>for WHS is almost assured. The lower end of the market in NZ will continue 
>to grow organically but will also grow becuase more and more people will 
>find that the red sheds are the only place they can afford to go.
>
>In some respects this trend is also happening in Australia. Even though 
>there is a greater level of wealth there is a growing share of less well 
>off people. In addition it not seen as uncool as it used to be to be seen 
>in these stores.
>
>Whatever WHS report in the next week or so I am sure the market will not 
>respond positively. The underlying fundamentals relating to a successful 
>business model still remain the same.
>
>Warner - I think you had an entry point of 525 in mind - it wouldn't 
>surprise me if it drifted doen somewhere near that in the next few weeks.
>
>Bearing in mind that the WHS price was on its way through 525 when the 
>Australia announcements were announced if it got down to that level again 
>it would have to be 'where everybody gets a bargain'
>
>Let's see what happens - sorry I got carried away again with WHS. Did take 
>some profits (for the family trust) in the low 600's but definitely looking 
>at getting more. Like you Warner it's picking the right level to maximise 
>gains.
>
>Peter

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