We have significantly underestimated the resilience of the Australian Retail Sector, where quality stocks like JB Hi-Fi (JBH) have already soared to all-time highs in 2024. The issue was the market, including ourselves, became too concerned with the pressures weighing on the Australian consumer from rising inflation and interest rates, but as we saw from Nick Scali (NCK) this week, things aren’t too bad and are now appearing to improve, supported by the large cohort of Australia’s that don’t have a mortgage and have benefitted from higher rates.
While the risk/reward on LOV ~$25 isn’t exciting, the trend is clearly up, and retail is hot, i.e. don’t fight the tape.
- After correcting over 37% from its April’23 high, LOV is being lifted by strong results across the retail sector which is dramatically improving sentiment. A test of last year’s high now looks like a strong possibility – LOV reports on the 21st of this month.
MM is cautiously bullish LOV ~$25
Add To Hit List
