Forum Archive Index - August 2003

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

Hi Pete,

> 
> One thing that concerns me
> though, is the recent fall in the share price (It's fallen $0.25 since
> I've been watching it!).  My question is:
> 
> Does anyone know if there is reason behind the recent fall?  Is there
> some announcement/article that has escaped my research?
>
>

Sluggish consumer confidence figures in the USA?    Don't ask me how 
that directly flows through to the WHS shareprice - that' s Mr Market 
for you!

The share price of WOW, Aussie's number one retailer, coming off the 
top, and an associated flow on effect to other retailers?

> 
> The cynic in me said that it due to insiders selling out prior to a
> (possibly) disappointing annual report.
>

We already know this years result will be disappointing, so that won't 
be the reason.  It could be that these so called 'insiders'  think that next 
year will also start in a disappointing way.    But you didn't invest in the 
Warehouse banking everything on a recovery in Australia next year did 
you?

> 
> My current strategy is to buy in as soon as the price closes above the
> previous day's close (That's my feeble attempt at technically timing
> my purchase). 
>

Thus guaranteeing your final return will be worse than if you had 
bought the previous day!

>
>For those who are interested, the fundamental
> justification for purchasing WHS is as follows:
> 
> The current ratio (i.e. for every $1 of current liability we have $x
> of current assets) has been increasing, from 1.63 in Aug '00 to 2.484
> in Jan '03.
> 
> Gearing ratio (a measure of how much long term debt the company has)
> has been decreasing, from 0.41 in Aug '00 to 0.365 in '03.
> 
> The only area of concern is (apart from the one detailed above) is the
> return on assets percentage (how much revenue the company generates
> from each $1 of asset) - which has fallen from 14.5% in '01 to 13.5%
> in '02.
> 
>

We have already been told about the lack of a suitable series of 
'hooks'  (read having the right item on the front of the WHS brochure)  
to get the Australians into the yellow shed stores week after week.   
We were also told of the lack of anything to market in terms of 
electronic game workstations in NZ last Christmas.     This is all 
historical data that I think goes a long way to explaining the 
deterioration in ROA.

SNOOPY

disclosure hold WHS



--
Message sent by Snoopy 
on Pegasus Mail version 4.02
----------------------------------
"You can tell me I'm wrong twice, 
but that still only makes me wrong once."


----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/chat/forum/