Hi Octogenarian,
Premier Investments (PMV) is a stock that did catch our attention last month on yield scans. This retail company owns and operates apparel brands such as Peter Alexander, Smiggle and Just Jeans, while also holding strategic investments in other retail businesses, is forecast to yield ~6% over the next 12-months.
However, with the stock having more than halved over the last 18-months and trading conditions tough for Australian Retail with interest rates poised to rise once or twice before Christmas we’re inclined to be patient at this stage. We’re not fans of some parts of their business, and we sort of think their best days are behind them.
In terms of DDR, it has indeed been a tough week with the stock down ~13%, not helped by a down grade by Morgan Stanley. We felt there FY25 result delivered in the last week of February was solid and the market initially agreed taking it in its stride with the stock ending the day marginally higher.
- Revenue of $2.57bn +12.5% YoY
- Profit of $85.6mn was up +8.8% YoY.
- Final Dividend of 11.5c Fully Franked.
We must be cognisant that the stock is testing new 6-month lows, but we feel value is surfacing, supported by a ~5% fully franked yield – though we also note, they are unlikely to growth much this year. We did own this stock not long ago, and sold it above $10, saying at the time: We are taking profit in Dicker Data (DDR), with the view that the re-rate higher based on SME tech refresh has now largely played out.
- Following the recent weakness, DDR is back on our radar for the Income Portfolio, but it still feels like there is more downside momentum to come in the short term.
