ValueLine: The Reject Shop
The sharp fall in The Reject Shop’s shares might be an opportunity in disguise. Roger Montgomery thinks it will a stock to watch in 2011. Read Roger’s article at www.eurekareport.com.au.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Graham Rennie
:
What’s happening to JB Hi Fi? Should we be worried – or buy more?
Roger Montgomery
:
Hi Graham,
I cannot offer any advice. In September I wrote about a slow down in growth and the price first rallied to over $22 before sliding to be 10% lower than when I expressed my concerns. There are mixed views here at the blog. Though the price is lower than intrinsic value, I think investors will have to wait until negative sentiment towards retailers changes. Of course Buffett pointed out; “you pay a high price for a cheery consensus”. If JB is doing it tough (IF they are), then their competitors are doing it even tougher.
zoran
:
Hi Roger
I will comment again as soon as article is available on your website,but when TRS opens more stores(planned for 2011) watch earnings and share price go to new highs.
Cheers
Zoran
Roger Montgomery
:
Thanks for your confidence Zoran, You have fired up the blog.
Greg Mc
:
G’day Roger,
I have a question about your Valueline portfolio. You have Cochlear in there, with a negative safety margin that looks like it will take about 3.5 years to make up if I understand your table correctly. It is still in the portfolio. On the other hand you have Forge, which has a safety margin of 47% and an expected increase in value of 31% and it does not appear. I think we all recognise that the directors sold a slab of the company to Clough way too cheaply and that they may make the odd dud decision in this area, but still…..
Of the two, both A1s, from this point on, and taking CGT into account for COH, which is likely to produce the higher return (I have an opinion, obviously!)? For that matter, are you sufficiently confident that FGE will produce a superior return compared to cash that it warrants a place in the Valueline portfolio? If not, what does FGE need to do from here to convince you that it is worthy?
Big fish still being caught in the river here too…..
All the best for Christmas and 2011.
Regards,
Greg
Roger Montgomery
:
Hi Greg,
Let the team at my office know how to get in contact with you in the Kiewa and we’ll have coffee.