Forum Archive Index - June 2003

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Shayne,

> 
>I am a little confused at why the WHS shareprice has turned from 
$4.20
>about two weeks ago to $5.30 on friday. I mean, what was the act that
>was done in order for the market to perceive WHS shares as 
>undervalued hence making a recovery???
>

Nothing.    The earlier sell off from $7.20 to $5.30 reflected the lower 
medium term growth outlook for this share.   The further sell off to 
$4.20 or so was irrational.    To those who study the fundamentals of 
the share and appreciate the management's strengths this was 
obvious.   If however, you were simply a trend follower who didn't really 
know what the underlying value of the Warehouse was, you were 
always going to lose by selling out at $4.20 or so.

>
>
>As the market is aware, WHS
> has struggled with its Australian operations.
>
>

The Australian operations were never going to be profitable 
immediately.    Personally I don't see the Aussie expansion as being 
that far off track.  And the Warehouse doesn't have Australia as its 
only growth engine..

>
>
> I do believe that when WHS was trading at around $4.30 
> that this was a discount, however only a
> discount on its future outlook when things become more certain and 
> WHS are able to iron out the creases they have in their Australian
> operations. Based on Fridays shareprice, i wouldnt touch WHS with a
> ten foot pole....at least!!!
> 
>

So your strategy will be to wait until WHS has sorted out its Australian 
operation and buy in at the higher price that reflects that?

SNOOPY



--
Message sent by Snoopy 
on Pegasus Mail version 4.02
----------------------------------
"Stay on the upside of the downside, 
Anticipate the anticipation!"




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