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Online Share Trading

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retailers crack on

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SimonPB
Valued Contributor
new highs for WHL, MPC & SHP
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55 REPLIES 55
DEP
Super Contributor
hmmm, is it sustainable? Retail Bubble...
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Not applicable
which is why i am so incredibly wary of being long the alsi.....a market help up/pushed up by defensives is almost always a market preparing itself for downside. The latter stage rally is of course the one you really have to be cautious about.
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SimonPB
Valued Contributor
bubble sure, maybe, early days .. PE's only in the low to mid 20's .. but the beauty of a bubble is that it goes on for longer than anybody could believe .. when SHP PE hit 20 I thought expensive, now it has hit almost 30 .. big picture is what one does in a bubble ..
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SimonPB
Valued Contributor
but defensive stocks been running way way hard for a year or more .. sure one day it'll all revert, but Q is how much longer can they run, a day, a year .. more or less ..
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Not applicable
poor buggers buying now dont realise earnings are backward looking...woolies figures boosted by unsecured credit extention...buying back some franchise stores and African expansion which has hit a brick wall. If anyone has ever travelled in Africa they will know there are just not sites and infrastructure for stores...a lot has been made of the African potential...just not there yet...where will the growth come from when the woolies card has been maxed out...and beleive me it has.
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Not applicable
yes but then people were buying risk...now they buying what they perceive to be safety and thats the difference...
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prancing_horse
Super Contributor
Sold 1/3 of my MPC the other day at 133 having bought them at 25 in April 09. Retailers starting to look more than a little over priced. As good as SHP's results were, I feel they cannot sustain their current PE. If there is no pull back I think the sector is going to flat line for some time. Is unsecured lending having anything to do with the retailer's buoyant sales? If so and that bubble bursts, I definately want to be on that fufee slide.
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DEP
Super Contributor
Well, shorting would be one option ... but Std Bank CFD's has suspended shorts on most Retail stock including SHP MPC TRU... Why i don't know?
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kwagga
Super Contributor
One thing I've realized over the years - Once you get a correction of note, the real star performers that in part created the correction in the first place never are the stars after the correction. We saw it with IT shares in 2002 and we saw it with resource shares after 2008. Somehow I don't yet see that with retail shares yet. But then again, I also don't see a correction of note looming right now. Maybe a 6-7% blip and then we go again. As long as the earning come through these shares will continue to perform well for sometime to come.
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SimonPB
Valued Contributor
sure .. point is still that this plays out over lotsa time ..
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Not applicable
i know some pople who work for nedbank in the unsecured loans div......its kinda an industry inside joke to see who can circulate the funniest reason why people are wanting to access credit.....everyone knows they using it to just get buy (i.e. buy groeceries) ...but somehow the unsophisticated folk applying for these loans feel compelled to come up with the most fanciful reasons to access the credit...car engine blowing up is a favourite....i meen how can you extend an already indebted person who earns 10K.. 70K and not let that bit u in the toggas later?
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SimonPB
Valued Contributor
ya maybe .. I thinks it been more about cost cutting and inefficiencies .. revenue was modestly higher, profit well higher .. an they cannot cut costs and improve inefficiencies forever .. but whatever the case I some 400% up an not dismounting until I see real weakness ..
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SimonPB
Valued Contributor
an the answer to the incoming Q is 3 years ..
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DEP
Super Contributor
agree... unsecured loans the next pain for the economy (+/- two yrs time).
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Not applicable
yes for sure...partner works for woolies and its an amazing operation..but the headwinds are there....and it has become very bloated at the top...Moir is doing something about it but could risk losing some good ppl along the way...
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prancing_horse
Super Contributor
I think the sector is becoming or will become more competitive, Zara starting to put it's toes in the water, and waiting for Walmarts move. P & P and SHP adding clothes to their food store etc. Wage increases are around the 6-7% mark, yet fuel, electricity and food climbing way above that level, meaning disposable income getting a smack. As BTO said in the 70's "you ain't seen nothing yet. Rams for once do you agree!!!!!
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SimonPB
Valued Contributor
ya, clicks lost a bunch a few months back and that be a risk (amoung many risks at 22x PE) .. in my mid tier portfolio I keep it simple .. buy cheap out of favour and ride it for as long as possible ..
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kwagga
Super Contributor
Unsecured small loans still remains a SA phenomena. That constitutes a soft landing in my books when earning go belly up for these lenders, wholesales, retailers. The black swans will come from planet USA.
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DEP
Super Contributor
Question Simon, why did STD Bank CFD's suspend most retail stock shorts?
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