Mate the only negativity about WHS is that most see little growth potential in WHS .... they have reached a point of saturation in the NZ market and at best probably can only consolidate their market position while doing their best to maintain margins
Financially WHS performs bloody well .... but the punters say not well enough .... at least those punters with a growth mindset .... hence the shareprice drifting down
For all their (perceived) woes last year WHS returned a 20% on invested capital .... bloody fantastic and a return that most companies would envy .... even this years guidance (is actually $62m-$66m and not the $80m you mention) will result in a ROIC in excess of 15% - a company making excessive returns on capital .... truly wealth creating
So how do you work out what WHS is really worth? Even at 10% cost of capital and building no growth MVA is about $400m .... add WHS equity of just under $300 and market cap should be about $700 on this basis (8% cost of capital gives $770m). Market cap today $843 so reasonable if people still believe some growth is coming or a takeover premium.
Another way is look at dividend yield - say a 20 cent divie .... thats 7.4% or over 10% gross .... not too bad
So maybe current price is about as low as it will go .... or give it a few days for the growth punters to finally get out and it might be a little lower
The current discussion is similar to all the pages and pages on sahretrader about how a dog RBD is ..... RBD sales have always been around the $300m mark (slowly creeping up now) and except for a couple of years a while ago have always made decent returns on the capital invested ..... these days that return is over 50%. The point making is that RBD has for years seen as a dog ..... except for astute investors who recognise that high returns on capital will always lead to high dividends (even with pretty large capex requirements). Growth per see is not always necessary to make above average returns
So maybe look at WHS as a bond and if you can get 10% plus a year thats pretty good ..... if you want growth maybe WHS is not the place to be but in saying that the face value of the 'bond' will at least keep up with inflation