Stock Update
Momentum
Australia

JB Hi-Fi (ASX:JBH)

10 Feb 2020
By
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.

 

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4
Comments

Ralph Hamilton

‘Tis amazing. They offer bugger all customer service. I wanted a particular model Canon Printer and they refused to get it in for me. They only wanted to flog what they had on the showroom floor. Needless to say; I bought it elsewhere. I worked in the computer Industry for 30 years.(Engineering/technical side) So naturally I will not put up with such nonsense. I guess the success of Bunnings proves, you can sell any rubbish as long as it is cheap. JB have lost me forever and for everything.

Shannon Rivkin

Hi Ralph,

There’s no doubt in my mind that the customer service isn’t as good as it should be. Looking at the company’s cost of doing business, you can see that in the numbers. But the store format and the product range makes that less important than it would be for other retailers. I personally find it a very appealing experience shopping in JB Hi-Fi even though I completely agree that the customer service is lacking.

Exactly like Bunnings!

Regards,
Shannon Rivkin

Ralph Hamilton

Jahwohl Bruder. Sie haben recht.

Also. One should not allow one’s opinions or emotions, influence one’s investment decisions.

Happy investing……Ralph.

Shannon Rivkin

Hi Ralph,

A very good investment mantra!

Regards,
Shannon

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