ValueSeeker8
19 Jun 2018
Dividend rise and better performance Final dividend declared in the interim results 5.75 p (2017, final dividend = 4.64 p) to be paid on the 3rd of Aug to shareholders on the record 29 June. This retailer is doing well as apposed to many others.
II Editor
24 Apr 2018
NEW ARTICLE: Stockwatch: A near-8% yield offers support "Is £47 million retailer of women's clothing LSE:BON:Bonmarché evolving as a genuine turnaround or value trap?An update for its financial year to end-March 2018 cites profit in line with expectations albeit "disappointing" like-for-like store ..."[link]
TX2
20 Feb 2018
Re: SP We have also seen a small rise in the share price of another value retailer Shoe Zone from recent lows.Both are well financed & well run operations with a niche market.Perhaps a few investors see them as a value/income proposition.I hope they are correct,as I made a modest purchase in Shoe Zone & am watching this one with interest.
earnacrust
19 Feb 2018
SP What's causing this sudden rise in SP?
Bill1703
20 Jan 2018
Re: trading update "I'm taking a right hammering this week (card, AA and now BON). Think (hope) all 3 have been oversold..."Yes, me too KK... though I take some solace from the perspective that while it's one of these runs when it feels like all your holdings are just going down and down, my overall portfolio is down under 1% YTD. Just think what it might do if some of these dogs actually have their day!CARD - ongoing margin pressures (which we knew all about) mean profits will be lower - but by around 5%, NOT the 40-50% relative to where we got to last year or to how much "analysts" thought this was worth only recently. All evidence suggests people really are still buying cards - and queueing up at the CF tills so to do. Long-term investment case unchanged.AA - only new news is a broker report (!), highlighting plenty of caveats (none of which are new to us) and ultimately concluding the equity valuation is still just too cheap. Medium/Long-term investment unchanged (albeit a relatively risky one).BON - LFLs are volatile with this one (not something we didn't know), but the FY outlook still promising, reflecting the initiatives and firmer grip of new management. Minimal exposure to various negatives (onerous leases, weak balance sheet, pension deficit, weak online presence) hampering other retailers (and similar), yet you wouldn't know if from the stock's valuation. Perhaps more of a medium term investment case rather than long - but unchanged!It is at times like these that I have to remind myself that, as a long-term, contrarian and intrinsic value-orientated investor, I actively seek out such unfashionable, unloved and supposedly "challenged" situations - and hence I shouldn't really moan when market sentiment remains against them. I really should just "buy and forget", rather than spend all my time monitoring the minutiae of day-to-day progress - but then, how else would I fill my time other than shooting the breeze on here??
TX2
19 Jan 2018
Re: trading update A positive at least is that much of the store sales decline appears to be moving to online sales,which indicates that customers appear to like the product offer merely changing their buying habits some perhaps after looking at the products in the shops later decide to buy online.Who knows?Obviously you are still left with store overheads spread over fewer sales.At least BON is not locked into long store leases which is the worry with retailers now so it can close under performing stores reasonably easily and gives it the opportunity to negotiate keen rentals on other stores as & when they become due .Average outstanding lease is just over two years with almost none over 5 years.(Card Factory & ShoeZone are two other value retailers that have a similar lease profile).The balance sheet is also in good shape and the company has a niche market,albeit a competitive one.Like its products it has to be a value proposition to be worth buying as I don't see much potential for re-rating........I am quite tempted.
Bill1703
19 Jan 2018
Re: trading update "A 20% fall seems a little harsh considering profit expectations remain "in line". Obviously the fall is due to the decline in LFL sales, which investors and analysts seem unduly fixated on..."Yes, the over-focus on LFL is one of my regular rants - it is a delta, not a quantum, and is only ever one part of the whole picture. For some stocks, only a small part.The LFL data for BON has always been relatively volatile - in both directions. And given LFL is always comparing one volatile number to another, you have double volatility... the SP reaction is understandable enough in a very nervy market, particularly so with so many retail traps opening up day by day.And we are only back to where we were quite recently, in SP terms, so most likely a case of "okay, let's go again!" This one is clearly going to stay volatile and subject to smackings whenever the data even hints at disappointing - but at the same time we have the relative comfort of all of ongoing self-help story, the strong balance sheet and entirely undemanding valuation. See below for edited highlights from broker Investec today: "Despite the difficult trading backdrop, management stuck to a more full-price sales/less discounting strategy for the second year in a row. As a result, gross margin improved but at a cost to sales... Efficiencies and tight cost control means guiding to FY18 PBT in line with previous expectations assuming no material change in market conditions. Company-compiled consensus FY18 PBT is £8m vs INVe £8.5m... Cut FY18e and FY19e PBT by 6% and 5% respectively. Our forecasts assume positive Q4 sales and gross margin decline... We maintain FY19e growth assumptions, but off a lower FY18e base...Valuation (CY18 PE 8.7x; DPS yield 6%) undemanding given solid balance sheet & self-help opportunities. While the shares are likely to react to the scale of the sales decline short term, we believe progress from the self-help strategy is evident. A more flexible business model is emerging. Further progress likely in FY19 with focus on more buying improvement, operating efficiencies, digital & driving loyalty. TP maintained with downgrade offset by peers re-rating."
Kool Keith
19 Jan 2018
Re: trading update I'm taking a right hammering this week (card, AA and now BON). Think (hope) all 3 have been oversold.Bon, profit still in line with expectations and on-line sales increasing very nicely granted at the cost of store sales but surely on-line is more profitable if sales down 5.5% but profit still in-line...
pendil
19 Jan 2018
Re: trading update A 20% fall seems a little harsh considering profit expectations remain "in line". Obviously the fall is due to the decline in LFL sales, which investors and analysts seem unduly fixated on. A decline in LFL can result in a lot of discounting to clear stock but in this case they have "adjusted their stock purchasing" to avoid that and gross margin percentage is actually slightly up. That combined with "tight cost control" means profit expectations remain in line.It's true that the December sales performance in particular is disappointing, but it is only 5 weeks and I would think Bonmarche is a little less geared to Christmas performance than some other retailers.
old deer
19 Jan 2018
trading update see [link]
Bill1703
01 Jan 2018
Re: 2017 Top 10 Stocks - Top 10 Stocks f... "... Sainsbury in my view played a blinder buying Argos and hope they had a great Christmas and I'm glad to see Argos integrating into Sainsburys stores must have huge cost savings, WTB also holding as like card their Costa's are always busy and they might spilt Costa and P.Inn?"Yes, my take on WTB is very similar to CARD. I am very happy with the long-term story and I am holding happily on for that - but on a strictly 2018 view, it is now harder to see the operational and/or valuation catalysts which will deliver the sort of upside I need to be seeing.Upside, from up here @£40, of course... a different story when we were down not far above £35, only back in mid-Nov, not to forget. Even so, it was a tricky call (as it was with CARD) to leave it out of the 2018 list, with its omission at least partly a technical conclusion. The late-2017 rally seemed largely due to renewed talk of the Costa/Hotels split - and while I agree with you, I think this is the eventual end-game (and probably always has been), I don't see it this year, or indeed next, most likely. If they are going to do it, they'll want to do it when (Costa) sales trends are somewhat firmer than they are likely to be near-term, when investment levels have reached more mature levels, and when they've had a chance to prove the potential from the foothold in China. So I can see management talking down demerger hopes for now - and possibly the SP with it, at least in the short-term (ie. H1 2018). As for Sainsbury, I also agree on Argos - it'll (continue to) prove a good deal at a good time. But it's real worth to the group will only pay off over the medium term, and in the meantime it is the core grocery business where recent trends have been underwhelming, if not exactly disastrous. But as I say, the valuation doesn't demand too much, and I feel no compelling urge to bail at 240p... but if we do get back to 280p, or anywhere near, sooner rather than later, that might be the time to exit stage left!
Kool Keith
01 Jan 2018
Re: 2017 Top 10 Stocks - Top 10 Stocks f... Thanks for coming back Bill, since posting (forgot to ask about wtb ) My average price (div reinvested) is just shire of 77p. With that in mind thinking of taking my original investment out and see how 2018 goes for the balance and hopefully collect more div's but this time will probably take as cash and not drip. Need some capital for your 2018 selections after all Card, I'm also holding however, I do have a sell order in place for a selection of shares I bought on a dip and is set at 333.Sains and Wtb will be keeping. Sainsbury in my view played a blinder buying Argos and hope they had a great Christmas and I'm glad to see Argos integrating into Sainsburys stores must have huge cost savings, WTB also holding as like card their Costa's are always busy and they might spilt Costa and P.Inn?Glad to see IMB & MKS are still on the list.Glaxo is on my tracker and probably be the 1st purchase I make, when I make. as is Connect & WPP & ITV but ITV been there for a while!!All the best B
Bill1703
01 Jan 2018
Re: 2017 Top 10 Stocks - Top 10 Stocks f... "... outside of the 10 for '18 will you remain a holder of Bon, Card, Sains for the foreseeable?"KK - BON is the one I am currently unsure of. A great run at the last weeks of 2017, nice to see of course, but begs a few questions... Possibly just a reaction to encouraging interims, but an unusually delayed one if so? Or does the market know something we don't?? I wish I knew... and if it doesn't (and most often, it does NOT), then it could easily retrace significantly early in 2018. I first bought in too early, though later "averaged down" so a cost-price around 115p and a decent enough return as things stand, though hardly spectacular. Not sure exactly when they'll update on Xmas trading (last year 20th Jan), but they could also be caught in the cross-fire of those peers updating earlier in the month, so if it's one to ponder, I need to be pondering it ASAP! The valuation is certainly not demanding even here, but no longer stand-out compelling - in absolute terms or relative to peers.In contrast, I will definitely be holding on to CARD. The long-term story remains intact and highly attractive - I just have a couple of caveats over the 12 month horizon. The margin pressures will wash out of the equation soon enough but will likely persist through 2018, and the balance sheet is more mature now, so big special dividends are less likely (for now). Management will likely continue to take the "long view" (eg. preserve and entrench their USP advanbtage rather than rushing to shove prices up to mitigate margin pressures), and I think investors should align themselves accordingly, on a 3-5yr view. But if it proves me premature by delivering again in 2018 - so be it! And no plans to exit my SBRY holding, which is not a huge one. If anything, this was my biggest disappointment of the 2017 list... I put a 290p 'fair value' target on it and a perfectly good H1 saw it get very close, but since then it's been all downhill - for the stock and for core operational performance, with some underwhelming reporting and messaging. It's still not at all expensive - particularly vs peers - but another down years for earnings (and hence divi) looks inevitable, and 'fair value' now is probably more like 260-270p rather than 290p. If it had stayed down at the 225p dip back in November I'd probably have named it for 2018 - but not now, and not enough.
Kool Keith
01 Jan 2018
Re: 2017 Top 10 Stocks - Top 10 Stocks f... Hi Bill, outside of the 10 for '18 will you remain a holder of Bon, Card, Sains for the foreseeable?Good luck for 2018
Bill1703
01 Jan 2018
Re: 2017 Top 10 Stocks - Top 10 Stocks for 2018 As foreshadowed here and all relevant boards... 2018 trading from tomorrow, so time to repeat last year's "virtual portfolio" challenge. Same rules, as per the papers - equal weighted, valid for the whole year with no switching, full owning-up at year end! AACapitaConnect GroupGlaxoSmithKlineImperial BrandsITV Lloyds BankingMarks & SpencerStagecoachWPPI retain a bias toward UK exposure and 'Value' (the two closely related, obviously), with an expectation that the UK domestic outlook will clarify satisfactorily (if not wonderfully) this year. But it's no slam-dunk... and so hedged with a decent slug of overseas earnings and a general focus on "stock specific" stories - with LLOY the only real pure play on 'UK PLC' and associated sentiment. Ultimately, well aware that it's near-impossible to avoid losers as well as winners, I have asked the question - can I see 15% over 2018 (plus divis)? Without necessarily much help from the wider market. Four stocks stay in from 2017, with CPI, IMB, ITV and SGC still to justify their original inclusion and getting another chance (SGC was a close call). Bonmarche has done its job as "speculative" midcap retail play; VOD still looks fine to me but harder to see sufficient upside in either valuation or financial reporting; CARD and WTB were tougher choices, both still good for the long term IMHO but I see their respective attractions now more finely balanced against likely persisting near-term headwinds.I will doubtless be elaborating on the case for each of the "new" inclusions in the course of the year. FWIW stocks actively considered but failing to make the cut (as well as CARD and WTB): Braemar and SBRY (from my 2017 Top 10), then Aviva, BT, Debenhams, Gattaca, Merlin, Morrisons, Trinity Mirror.FYI I own 7 of the 10 stocks, with all of CPI (still!), WPP, GSK under active consideration (probably in that order). I'd be surprised if I didn't buy into at least one in the course of 2018.
