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26-07-2021, 05:21 PM
#4441
 Originally Posted by Ferg
Hi nztx
IMO it is better to remove the "Goods in transit from overseas" value when calculating stock turn or inventory days. Why? That value represents a deposit paid to an overseas supplier to secure shipment. Whilst the cash has left WHS, the stock has not yet arrived - it is either on the water or still being manufactured. Through these troubled times, overseas suppliers are demanding higher deposits and when combined with longer shipping lead times, this is resulting in higher values for "Goods in transit" on the Balance Sheet. If you remove these values then you will get a more accurate stock turn. My gut feel is you will see a better improvement than previously calculated.
Ferg
Good point Ferg - but for in transit to be starring in closing inventory then the debit
for prepaid costs must be included in COGS figures as well
How does this change the view of things ?
Reduce COGS as well as adjust the Opening & Closing inventories along the way ?
or do the two contra off ?
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26-07-2021, 05:25 PM
#4442
Originally Posted by Beagle
Interesting - with the analyst's views on WHS - does this suggest they see a one off post covid trading spike
and their views are eliminating this one-off out (or depending on what happens - maybe it could recur) ?
If it did, with presumably lockdowns - then we may see it normal occurence with lumpy ups & downs in corporate
performance in places..
WHS seems to have done a pretty good job of navigating troubled Covid times with fine tuning - how much of this compensates
for removing the possible trading spike out of the equation ?
They seem to have a lot of domestic input supplies into Retail for sale COGS - the import payables at HY Jan 2021 didn't seem too high
or overly increased - perhaps they balanced this or just a matter of timing of things - who knows ..
On a wider perspective - what are the analyst's views on other Retail stocks - BGR & HLG or dare I suggest KMD - where
post covid good trading times have been apparently seen as well ?
Okay, in NZ & Oz economies there have been huge artificially created waves of liquidity & money creation thrown into
the system by Govt's - with no real apparent moves to suck back out large surplus awash in the system so far to date ..
Last edited by nztx; 26-07-2021 at 05:36 PM.
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26-07-2021, 05:33 PM
#4443
Originally Posted by nztx
Interesting - with the analyst's views on WHS - does this suggest they see a one off post covid trading spike
and their views are eliminating this one-off out (or depending on what happens - maybe it could recur) ?
WHS seems to have done a pretty good job of navigating troubled Covid times with fine tuning - how much of this compensates
for removing the possible trading spike out of the equation ?
They seem to have a lot of domestic input supplies into Retail for sale COGS - the import payables at HY Jan 2021 didn't seem to high
or overly increased - perhaps they balanced this or just a matter of timing of things - who knows ..
I personally don't see it as a once off.
Torpedo 7 sales growing and opening new stores. Noel lemming can't keep up with demand. The Market growing and they have a subscriber option so free shipping if you pay a monthly fee. Recurring revenue is always a good thing.
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26-07-2021, 05:43 PM
#4444
Last edited by nztx; 26-07-2021 at 05:45 PM.
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26-07-2021, 06:00 PM
#4445
Big feed to be had here for those that know what to do, hint its not this so don't muck about with this https://www.bing.com/images/search?v...t=0&ajaxserp=0
It's this https://www.bing.com/images/search?v...=0&vt=0&sim=11
Disc: Bought another 10,000 today. Just warming up...
Last edited by Beagle; 26-07-2021 at 06:01 PM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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26-07-2021, 06:04 PM
#4446
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26-07-2021, 06:27 PM
#4447
Originally Posted by Beagle
Me also bought 20,000 today ...lets hope it works out well ...all positive but someone keeps selling ...who is that W69 ??
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26-07-2021, 06:33 PM
#4448
Oh dear ... I assume critical observations are currently unwanted, aren't they?
Anyway - my trustworthy Giro cylce helmet starts to disintegrate after 26 years of use, so I decided to hunt this afternoon for a new one.
Went first to Torpedo 7 ... and found out that even the basic model (something like $110) didn't offer a visor. Didn't like the colours on offer either. Pretty empty shop as well (I was the only customer) - why are we shareholders paying for empty premises offering goods nobody wants?
Happened to be afterwards in the warehouse and found that a very similar helmet like the $110 helmet in Torpedo 7 is $ 35 at the warehouse (sure, different brand, but same interior, same safety standard and same boring colours) ... same - without visor. Decided to look somewhere else. On my way back to the exit I noticed that most of the articles in the electronic department (like cellphones ...) are on "sold out". Not a lot of customers in this shop either.
Just wondering whether they make a lot of money with putting empty shelves on offer?
Was wondering this morning whether I should buy some more WHS shares (I do have a medium sized holding), but decided after this experience that I don't feel good enough abut WHS to buy more shares ... felt too much like shopping in some postwar socialist country where you buy what's available instead of what you want. Wouldn't buy Intershop shares either.
Anyway - more shares available for beagle, this is good  :
----
"Prediction is very difficult, especially about the future" (Niels Bohr)
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26-07-2021, 06:42 PM
#4449
Originally Posted by nztx
Good point Ferg - but for in transit to be starring in closing inventory then the debit
for prepaid costs must be included in COGS figures as well
How does this change the view of things ?
Reduce COGS as well as adjust the Opening & Closing inventories along the way ?
or do the two contra off ?
The journal entry for inventory in transit is:Debit Inventory in Transit . Credit Overseas Accounts Payable (notice the high overseas payables balance, which is a strategic shift in procurement policies)
Some of those creditors may have been paid resulting in an additional:Debit Overseas Accounts Payable . Credit Cash
None of this impacts COGS. To calculate inventory days and/or stock turn reduce the opening and closing balances by the value of inventory in transit, but do not change your COGS numbers.
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26-07-2021, 06:56 PM
#4450
Originally Posted by BlackPeter
Oh dear ... I assume critical observations are currently unwanted, aren't they?
[snip]
Just wondering whether they make a lot of money with putting empty shelves on offer?
Not at all BP - criticisms are welcome, especially if we are making incorrect assessments or judgements etc. I'd rather be wrong and cashed in than wrong, blissfully ignorant and facing a capital loss...!
You raise a good point about empty shelves. As supply chains get stretched resulting in delayed deliveries, those with stock on the shelf will win. I am seeing this first hand with my clients. Despite our best efforts, actually getting delivery of stock is the issue no matter the amount of deposit paid! In addition, having to wait weeks for delivery ex factory to a port in China is adding more time delays to the currently abysmal situation of being bumped off ships and a reduced shipping schedule. Anecdotally others have also seen stock shortages with Noel Leeming. Given the steel issues one of my clients faces, I wonder if it will also hit the likes of STU. In conclusion, we are not through he worst of COVID due to disruptions to international supply chains so your personal observation will not be an isolated event.
Last edited by Ferg; 26-07-2021 at 06:57 PM.
Reason: typo
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