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  1. #21
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    While it's still in an uptrend having gone up 50% in a year I'll stick with it. My practice is to do valuations looking forward rather than back. On that basis, if its fully valued on last FY figures and growth was to be 15% this year then I'd argue it's 15% undervalued.

    I do of course usually get things horribly wrong, so doing the opposite to me could be advisable.

  2. #22
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    quote:Originally posted by skinny

    yes its fully valued now
    Ok, have a bit of time now for a more considered reply! On the MHI main thread I (along with Halebop) value MHI at +$7 based on DCF valuations. With the latest full year numbers mine is revised up a bit (around $7.20) as sales for the second 1/2 was stronger than I was factoring in. The Canadian results are particularly good given currently Canada's economy is in a soft patch.

    As far as the chart goes I'm no techie but I reckon breaching $6 well and truly IS pretty significant. Its tried to do it and failed for a few months now with large selling depth always appearing at $6. Now the depth charts look quite different with no sig. offer volumes to $6.25 odd.

    Like FBU passing $4 and NPX passing $6 now its done it IMO it will keep on going []

  3. #23
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    Skinny, what you say about the resistance at $6 being overcome is of course quite correct, though a minor detail to my mind.
    Technically, for MHI it has been "business as usual" - another month, another symmetrical triangle, another upside breakout continuing the uptrend. The real test will be when MHI approaches the $6.40 resistance level marked by the double top of January last year.


  4. #24
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    Hooray!
    Marriage isn't a word. It's a sentence

  5. #25
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    Thanks for the chart update Phaedrus
    As said I'm no techie so I was just going by what seemed to have been holding it back in the past wee while.

    Actually any comments you care to give on how you think about share prices as they approach previous all time highs would be much appreciated. I suppose you see them as pretty signifcant resistance levels because its where trends have broken down in the past? So a breach all else equal would be a fairly bullish technical signal? I ask because MHI is my largest individual holding and my 2nd, DVN in the US, has a similar looking chart to MHI and it closed at its highest price ever today on fairly light volumes (the previous high was set in March 2001). For both companies I think the share prices still have a way to go on the fundamentals but even so...

  6. #26
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    "Auckland Today", a free rag that appears in my postbox once in a while, had an interesting profile on Mr Michael Hill. Although the article had nothing that hasn't already been reported before, it's worth quoting a few passages:

    "After successful years in Australia, the Michael Hill brand is now making inroads into Canada. Next stops, the United States and Britain. Hill is working on an 18 year timetable towards global domination, taking 'slowly does it' as his motto. Like Churchill - one of the many historical figures he cites during our conversation - he's taking on the Canada market a city at a time, strategically scattering Michael Hill Jeweller stores around the country"

    "'It's like war really' [Micheal Hill]. He's confident that the company formula - identifiable shop design, specific marketing, established training systems - will work anywhere."

    "'In Australia, there is always going to be some New Zealanders, so they know you, but in Canada we were literally starting again. That's good for you, because it gets you back to basics. [Michael Hill]".

    And the rest of the article talks about how he built his empire despite failing School Cert first time round etc.

    What I find interesting is that the rollout of MH stores is almost like a franchising business model, except for the ownership factor. Transplant your systems, branding and company culture to another geographical location, test the waters, and if it is a success, then do it again somewhere else. Maybe apart from a bit of minor tweaking, there doesn't seem to be a need to change the business model and systems in order to "localise" the business. An easily transportable expansion model.

    Maybe the real key is the "slowly does it" model and MH has found a Jewellery business model that is well-suited to the Western Economies. It would be interesting to see how MH would handle an expansion into Asia, or if they'd even consider the prospect.

  7. #27
    Senior Member Halebop's Avatar
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    quote:Originally posted by boring

    ...'It's like war really' [Micheal Hill]...
    Business is exactly like war. The wisdom of Sun Tsu seems to have diminished in popularity but still rings true...

    Sun Tsu Link

  8. #28
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    Phaedrus - from your chart, could it be interpreted as being in an uptrend, because it seems to have been in a mini-uptrend since May, or broken above a previous high as it has gone above the April(?) high of 6.05(?). Or is that all pretty irrelevant until it get above 6.4?

  9. #29
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    Kooe, (are you really an Australian?),
    MHI has been in an unbroken uptrend since 6/10/03. On that date, it closed at 441, thus making a higher high after a higher low. Uptrends are defined as a series of higher highs and higher lows so 6/10/03 was the first day on which these conditions were met. You can clearly see that from this point on, MHI has continued making higher highs and higher lows, so the uptrend is still intact and ongoing. Uptrends are presumed to be in existence until they end with a lower low after a lower high - a downtrend.
    I will update and edit the chart I posted on 15/7, adding markers for these points as follows :-
    (1) Low
    (2) High
    (3) Higher low
    (4) Higher high ( = Uptrend )
    Some people seem to think that uptrends are a subjective thing, all in the mind of the beholder and open to interpretation. Not so. They have clear definitions and thus are a matter of fact, not opinion.

  10. #30
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    Since firing off a lot of buy signals late last year, MHI has gone into an accelerating uptrend. This has left some indicators behind and there is now too big a gap between them and current price action - much of your gains would be given back to the market before sell signals were triggered. Revision of the indicators we are using to monitor this uptrend is overdue.
    While the trendline that was in use has become obsolete, because of the accelerating nature of this uptrend we have not yet been able to draw a new confirmed trendline. Successive tentative trendlines are plotted in light green.
    The 100 day Simple moving average can now be shortened to 50 days, bringing it much closer to the latest price action.
    Notice how a dynamic indicator such as the ATR (Average True Range) based trailing stop has automatically adjusted itself to the recent rises in the price of this stock. That is the strength of an indicator that is moderated by the volatility of the underlying stock price movements.
    Take a look at the OBV plot at the top of the chart - it continues to rise steadily. This stock is still being accumulated and there is no sign at all of distribution at this stage.
    Many times during the course of this uptrend fundamentalists have declared MHI to be "fully valued". The market clearly does not agree yet - the shareprice just keeps going up.



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