WHS - Warehouse Group

**Beagle** · 15-01-2015, 07:09 PM

http://www.reuters.com/finance/stock...?symbol=WHS.NZ
4 analysts have downgraded WHS in the last week.
Now only 1 hold, 4 under-perform ratings and 1 sell rating.
Consensus EPS for 2015 is only 16.54 cps.
At $2.70 with the track record of this company the market is presently saying its worth a forward PE of 16.3 times 2015 earnings.
I can totally relate to why analysts have their current ratings.

Very interesting to compare WHS with Kathmandu which recently announced a slowing in the rate of sales growth.
KMD consensus eps for 2015 according to Reuters is 19.29 cps and their SP closed today at $1.90. This gives a 2015 PE of 9.85 with their, (in my opinion), better track record.
Consensus analyst view on KMD is outperform.

If we applied the same 9.85 PE multiple to WHS we'd be looking at a SP of only $1.63

Room for substantial further deterioration in WHS's SP ?... you be the judge.
Disc, don't own either stock at present...might be interested in KMD after it stops dropping.

**Bobdn** · 15-01-2015, 07:43 PM

It's a nasty business and I do respect your comments Roger. Still, I'll just hang on in there as I always do. I have a "responsible" amount of WHS in the context of my overall net worth so I'm not in the same position as I was with Chorus. In other words, I'm sleeping at night, it still hurts nonetheless

I do like the WHS, I never buy a company I don't like, and I did buy an excellent watch from the Warehouse's website this morning. It was featured on it's daily Red Alert sale. Despite what some people believe, the Warehouse parallel imports some top brands. The watch is a G-shock GW1000 Aviation model. It cost $499. The best (and I mean the absolute best) price I could have got from Amazon was $529NZ. The best price from NZwatches? $609. How about Christies Jewellers in your local mall? $750.

I'm so excited about my purchase. Here's a review of the watch if you're interested. It won't be to everyone's tastes but it is to mine. Just a pity we don't have an atomic clocks in NZ to calibrate the time "Multi-Band Atomic Timekeeping (US, UK, Germany, Japan, China) Receives time calibration radio signals which keep the displayed time accurate"

http://www.ablogtowatch.com/casio-g-...-watch-review/

**couta1** · 15-01-2015, 08:00 PM

Such is the fickle nature of retail it would only take one good sales period to send the price back over $3 much the same as Sum aye Roger, its a scary coincidence that you valued Sum at $1.63 a while back and now the Warehouse, obviously I have to disagree with you on this stock also but no offence mate

Disc- Holding at $3.27 buy in price.

**noodles** · 15-01-2015, 08:16 PM

Originally Posted by Roger

http://www.reuters.com/finance/stock...?symbol=WHS.NZ
4 analysts have downgraded WHS in the last week.
Now only 1 hold, 4 under-perform ratings and 1 sell rating.
Consensus EPS for 2015 is only 16.54 cps.
At $2.70 with the track record of this company the market is presently saying its worth a forward PE of 16.3 times 2015 earnings.
I can totally relate to why analysts have their current ratings.

Very interesting to compare WHS with Kathmandu which recently announced a slowing in the rate of sales growth.
KMD consensus eps for 2015 according to Reuters is 19.29 cps and their SP closed today at $1.90. This gives a 2015 PE of 9.85 with their, (in my opinion), better track record.
Consensus analyst view on KMD is outperform.

If we applied the same 9.85 PE multiple to WHS we'd be looking at a SP of only $1.63

Room for substantial further deterioration in WHS's SP ?... you be the judge.
Disc, don't own either stock at present...might be interested in KMD after it stops dropping.

The big difference between KMD and WHS is their growth strategy.
1. KMD expands their single brand into new territories (AUS/UK)
2. WHS acquires new brands in a single territory (NZ). Peter Lynch would call this "deworsification"

So for this reason , I'm with you Roger. While I don't own either, I'd prefer exposure to KMD at a pe=10, than WHS at a pe=10 (now 16).

Couta. What was your reason for buying WHS? Does that reason still hold valid?

**couta1** · 15-01-2015, 08:23 PM

Noodles I bought WHS as a divvy stock so that reason still holds valid plus I like the company

Also hold KMD.

**Beagle** · 16-01-2015, 08:57 AM

Originally Posted by couta1

Such is the fickle nature of retail it would only take one good sales period to send the price back over $3 much the same as Sum aye Roger, its a scary coincidence that you valued Sum at $1.63 a while back and now the Warehouse, obviously I have to disagree with you on this stock also but no offence mate

Disc- Holding at $3.27 buy in price.

No offence taken but I would however point out that I haven't valued WHS per se, I'm just making the comparative observation against where the market is presently valuing KMD. I'll leave it for others to decide where they see fair value for WHS but at least you all know where the analysts are presently sitting and which stock I think is more reasonably valued / prefer, (see comment below)

Originally Posted by noodles

The big difference between KMD and WHS is their growth strategy.
1. KMD expands their single brand into new territories (AUS/UK)
2. WHS acquires new brands in a single territory (NZ). Peter Lynch would call this "deworsification"

So for this reason , I'm with you Roger. While I don't own either, I'd prefer exposure to KMD at a pe=10, than WHS at a pe=10 (now 16).

You're on to it mate and I agree 100% with what you've said. I also think KMD is a better play in terms of their adventure / outdoor range of products playing into the tidal wave of comfortably well off baby boomers looking to get back to nature / engage in healthy activities. Further I don't think its a tired brand like WHS is. Perhaps we can continue discussing on the KMD thread, (not my intention to annoy WHS shareholders), as I'm not sure I want to have any exposure at all to retail but KMD is starting to look attractive.

**bull....** · 19-01-2015, 04:33 PM

looks like going to test lows around 2.50 soon

**BFG** · 19-01-2015, 04:41 PM

Originally Posted by bull....

looks like going to test lows around 2.50 soon

Agreed. Also looking extremely oversold as well. Ripe for a bounce back up a bit? Got any names for the dead kitty it will spawn?

http://www.bigcharts.com/advchart/fr...false&state=15