Following a strong report, JB Hi-Fi Limited (JBH) is now trading at all-time highs and has confirmed its status among analysts as one of Australia’s strongest retailers…
JBH, a holding within the Momentum Strategy, reported its interim results today and, despite rallying over 30% since the presentation of its FY19, JBH has managed to advance over 7% to an all-time high of $44.34. The numbers released by JBH paint the picture of a very well-run retail business that continues to grow the all-important same stores sales metric every year. JBH has done an incredible job of evolving with the changing interests of its customers and continues to be one of the highest quality retailers Australia has to offer.
Net profit after tax (NPAT), earnings before interest, tax, depreciation and amortisation (EBITDA) and revenue all came in above market consensus, which is all the more impressive when you realise these numbers have been upgraded consistently among the analyst community. The stock no longer offers the value on an earnings and dividend basis that it once did, but given the returns on investment (ROI) and consistent earnings and dividend growth the company has demonstrated throughout multiple market cycles, the stock has earned the high valuation the market places upon it.
After such a strong set of numbers, it seems likely the stock will remain in favour in the short-term and we expect the stock will remain part of the Momentum Strategy for at least the next couple of rebalances. Given how much we like the business, we hope to see it held for the foreseeable future.
