WHS - Warehouse Group

[Beagle]

Confirmed TA breakout and fundamentally still a VERY cheap stock. Trading update from Briscoes was very promising and showed accelerating growth in Q2 V Q1 on a like for like basis compared with 2019 sales which provides real encouragement that the retail sector has and is very strong. I see this as enduring for many years and if pressure is felt on consumers with rising interest rates the WHS will be the beneficiary as people shift to value purchases.

Very good chance of NZX50 inclusion in due course. Really looking forward to the trading update due out in the next week or two.

[Waltzing]

390 - 420 channel.

The MR B channel below ... right up there ...

[Beagle]

390 - 420 channel.

Sensible target in the very short term but I see this as probably a multi year rerate as:-

1. International travel stays well below 2019 level's for many years and most of that $10 Billion a year that would otherwise be spent overseas is spent here
2. WHS overhaul their procurement, logistics, distribution and stock policies
3. Store within a store efficiencies with integration of Warehouse Stationary stores within WHS stores
4. Rationalization of their store network with a weighted average lease term across N.Z. of only 4 years
5. Ongoing growth and critical mass efficiencies from Torpedo 7
6. Ongoing strong growth of Noel Leeming.
7. Attaining critical mass with the Online market
8 Growth of online shopping for WHS
9. Possible significant enhancement of their food and grocery lines

Plenty of room for improving their business model with super cheap metrics and an exceptional fully imputed dividend yield make this an exciting high yield opportunity with very strong capital gain prospects.

Holding heaps but the greedy Beagle wants even more

[alokdhir]

This time it will surely break above $ 4 after the trading update expected next week ....Briscoes beating them to it should irk them a bit !!

But after Briscoes update market has already got a whiff of whats coming from WHS ...update or not WHS should end next week around $ 3.85

[allfromacell]

​The Warehouse in Lower Hutt mall has cleared a big chunk of floor space. Gearing up for a proper grocery section maybe?

IMG20210807154602.jpg

[Dlownz]

Maybe a combined warehouse stationary more likely

[LaserEyeKiwi]

Maybe a combined warehouse stationary more likely

I hope so.

There is a warehouse stationary located just across the road from the mall where this Warehouse store is located (also a large Noel leeming which shares a car park with Warehouse stationary). If they combined the warehouse stationary into this warehouse, it would leave a good location available to open a torpedo7 store in the current stationary site, which is a brand that needs to grow in Wellington region (there is just one T7 store in Porirua City, with no presence at all in the wealthy area that is Wellington city and the Hutt)

749DBCB3-F307-4171-9132-81D24163E105.jpg

compare that to Rebel sport & Kathmandu:

B4A4F286-43BC-40C8-BF96-F63E7F5E3973.jpg
05AA0384-1286-4047-B877-C227C57FF02D.jpg

[Dlownz]

I hope so.

There is a warehouse stationary located just across the road from the mall where this Warehouse store is located (also a large Noel leeming which shares a car park with Warehouse stationary). If they combined the warehouse stationary into this warehouse, it would leave a good location available to open a torpedo7 store in the current stationary site, which is a brand that needs to grow in Wellington region (there is just one T7 store in Porirua City, with no presence at all in the wealthy area that is Wellington city and the Hutt)

749DBCB3-F307-4171-9132-81D24163E105.jpg

compare that to Rebel sport & Kathmandu:

B4A4F286-43BC-40C8-BF96-F63E7F5E3973.jpg
05AA0384-1286-4047-B877-C227C57FF02D.jpg

Then you could be on the money. Sounds perfect to move warehouse stationary and open up a torpedo 7 in the old spot

[winner69]

If TWG sales momentum is maintained in Q3 (even at a much lower growth rate than Briscoes) and if they maintain profit margin around 6% full year 'adjusted earnings' will be about $200m

Anything less means sales growth is slowing and/or margins have not been maintained

I'll settle for $190m adjsuted earnings

[Beagle]

$200m earnings on 346.8m shares = 57.7 cps !!! PE of only 6.4, that's nuts.
Payout 75% of that, (new minimum is 70%) = 43.3 cps in annual dividends. Oh my goodness
43.3 cps fully imputed = 60 cps gross = 16.2% gross yield at $3.70.

These metrics are truly mind boggling and we have a clear TA breakout to provide additional encouragement...not that we need it with the fundamentals being so truly compelling.
NZX inclusion in the not too distant future too. Hmmm.

Risks are shipping costs, stock procurement challenges and Covid. Super good looking risk reward ratio in my opinion.