Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi guys I noticed that Anthony Scali just sold a large chunk of his NCK shares to me this is a red flag Also your thoughts on the retail sector like hvn uni jbh and pmv which i notice you still have in your emerging companies portfolio Do you think these companies will struggle even further due to another interest rate rise Thanks Tony
Hi Tony,
We covered NCK on Friday morning here with the simple conclusion that we are neutral and see no compelling reason to chase the furniture retailer into this sell-down.
Overall, we still think it gets tougher from here in a general sense towards retail, as we enter an uncertain period for the local economy as interest rate rises take affect (i.e. there is a lag between when they go up and how this impacts consumer behavior), and we think this will weigh on consumer spending – for example, our last sale in the Income Portfolio was in Wesfarmers.
Bapcor (BAP) and Premier Investments (PMV) are both slightly different, PMV has a bunch of cash to make hay in any downturn while we think the risk/reward stacks up in BAP given the weakness in share price. Essentially, we are more concerned about the retailers that have run up on less bad news / better outcomes and would prefer to buy these into corrections – Super Retail (SUL) springs to mind as another example in addition to Wesfarmers. NCK was also one of those prior to the pullback.
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