Okay guys HLG looks pretty good to me. They have already taken a 25% drop in profits and a major hit to the share price. Even so they have a dividend yield of at least 8% p.a. (given nothing really terrible happens to the economy) at their current level of profitability. I believe the price wont fall much further because then that yield gets EVEN better! Imagine the yield when the company returns to its normal profitability in years to come? Perhaps near 20% if bought now. Imagine the share price too. It has no long term debt either, another plus in terms of risk in this current environment. I'm not a trader, so I dont try and pick bottoms, just look for good deals.
Okay now here is the REAL sweetener ... all speculation however ... my speculation too ... ever heard of PREMIER INVESTMENTS LIMITED??? Well they have recently bought Just Group (JayJays, Just Jeans, Portmans etc). They still have $300m cash left to invest in (my guess) retail! Consider now that HLG is worth $150m ... and therefore well within the price range. Consider also that HLG has no long term debt ... making it even more attractive a target. Its a similar company to the Just Group (synergies perhaps???) and HLG has had its share price halve over recent months. Sources say that Premier is actively monitoring a number of opportunities. Hmmmm, any thoughts folks? Anyone wanting to hire me as their analyst??? LOL.
Also my DCF of HLG values the company at $2.40ish given a 25% drop in 2009 sales and a 11% drop in 2010 sales followed by 3 years of recovery at 5% growth with a terminal growth rate of 3% thereafter. Very conservative an approach (just incase things get that ugly). Okay now my disclaimer ... I dont do this kind of thing for a living, so do your own homework!!! I also have seen many sell recommendations on this stock .. not sure hold long they have been on for.