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Yeah - no particular reason why this is sliding other than general malaise in the market. SFH continue to buy back stock and every time I go past one of their shops they seem to be busy but I guess we will have to wait until they give a trading update before we can expect any upward movement in the shareprice.


If it goes much lower I'll be topping up my holding though.

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  • 4 weeks later...

So much for my theory that women wouldn't stop spending on clothes!



Recommendation 20080422: Buy





Discretionary spending is trending lower due to consecutive interest rate rises, rising fuel costs and food inflation. Feedback from SFHÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s management implies flat to slightly negative sales growth in 3Q08 with lower foot traffic, especially across lower end brands like Millers. Other retailers we survey report similar trends.


Full Event Analysis




SFH says newer, high price brands are holding up better. 2H08 group sales are skewed towards May and June with a strong MotherÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s Day period needed to help offset the past few months. An existing hedging position means currency benefits from a higher A$ wonÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t flow through until mid next year.


WeÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢re clipping our earnings estimates with comparative sales revised from no growth to negative 3%. Revenue growth is only driven by new stores and recent bolt on acquisitions. FY08 earnings are revised 7% lower with NPAT of $26.9m on EPS of 14.1 cps.


FY09 NPAT falls by 12% to $27.9m on EPS of 15.4 cps. Dividend payments are supported by strong operating cashflow and minimal debt. We now expect a final 2H08 fully franked dividend of 4 cps, bringing the FY08 total to 12 cps. FY09 fully franked DPS falls to 12 cps.


The shareprice, down almost 35% since December, seems grossly oversold since our DCF valuation after adjusting for recent changes falls by only 10 cps to $1.80.



Recommendation Impact

(Last Updated: 20080422)

We think management can ride out any short term downturn and reiterate our Buy recommendation below $1.20, reflecting an FY09 revised PER of 8x and fully franked dividend yield of 9.2%.





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g'day snake,

well the sp might be in the doldrums but at least we're in good company . . . noticed that a company called Lazard Asset Management had lifted their holding from 10 to 12%, this is what I found from their website.



Lazard Asset Management is a subsidiary of Lazard Freres & Co., LLC, a pre-eminent global investment bank with over 150 years of experience. The New York based asset management division manages investments for corporations, endowments, public and private pension funds, individuals, and mutual funds.


Investment Philosophy

Lazard's investment philosophy centers around four principles:


Pick securities not markets: Smart investors use what they know rather than what they can only guess about. Lazard evaluates companies one by one and allocates capital to those found most attractive.

Don't overpay: The most common investment mistake is to follow the crowd in and out of investment trends, overpaying for securities. Lazard is not swayed by popular sentiment and analyzes security valuations on strong fundamentals and the potential for enhanced returns.

Manage risk: Lazard considers risk management to be a critical component of portfolio construction and makes a practice of understanding the cumulative risk resulting from individual investment decisions.

Stick to the discipline: Consistency is the hallmark of Lazard's discipline. Lazard does not stray from its mandate to obtain short-term results even if that mandate is out of favor at a given time. Lazard is focused on achieving long-term, consistent results.

Investment Process

Lazard follows a systematic process to search for undervalued opportunities within each asset class:


A global database screening identifies companies with low valuations, yet which exhibit high financial productivity.

In an intensive accounting validation process, Lazard's analysts examine balance sheets and financial data to determine a company's true value.

A fundamental analysis is conducted to ensure the sustainability of returns and to identify a catalyst for price revaluation. Periodic visits with companies and local presence are key to this step in the process.

Portfolio construction is decided by the managers/analysts of the investment team, whose goal is a portfolio that offers high expected returns at an acceptable level of risk.



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In reply to: alonso on Wednesday 30/04/08 09:39am

Hey Alonso,


Good to see a fund manager increasing their stake - it looks like the share price might be bottoming out - I have topped up my holding at a dollar as I think it is undervalued.


I meant to ask who put out the buy recommendation you posted last time?





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  • 3 weeks later...
I'm thinking that whem just group gets taken out - and that's looking likely - there will be a fair bit of cash looking for a home. This might be one place where it comes to live so now might be a good topping up time.
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