The Reject Shop (TRS)

Discussion in 'Stocks & Derivatives' started by finicky, Mar 27, 2014.

  1. finicky

    finicky Well-Known Member Silver Stacker

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    Geez, so you reckon this is a buy? Someone 'authoritative' does, not at liberty to say yet.
    This strikes me as either at a major low or ready to tip into the abyss. Right at the edge of decision - very risky. Would be scared to buy it myself. I have been watching it before today though.

    The Reject Shop TRS ALL DATA MONTHLY
    [​IMG]
     
  2. wrcmad

    wrcmad Well-Known Member Silver Stacker

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    Place an OCO order in both directions. :)
     
  3. finicky

    finicky Well-Known Member Silver Stacker

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    Hmm .. too hard for a troglodyte

    http://www.thebull.com.au/investment/a/147-one-cancels-other-(oco).html
     
  4. Caput Lupinum

    Caput Lupinum Active Member Silver Stacker

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    I'm not generally a fan of traditional retail shares but I too have been keeping an eye on TRS. It's balance sheet is pretty sweet and it's a natural growth company with low debt. I reckon the sell off may have been overdone on a flat christmas trading period but I'll hold off any trigger pulling until the company announces some forward guidance heading into the next quarterly report.
     
  5. Htu08

    Htu08 Member

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    +4.5% today.

    Why are we even stacking?
     
  6. BiGs

    BiGs Active Member

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    I will not buy TRS because I will not compete against the Chinese market machine. That said, TRS has a proven management model and are rolling out stores like crazy, paid for in part by a capital raising. They took a hit in the QLD floods and rebounded well. The recent tanking in January was a result of the half year financials where they admitted they are struggling with product margins and percentages are well below expected. But in retrospect, the stock valuation is now appealing in a P/E sense. Leading up to Christmas and early Jan, TRS was pretty overpriced.

    So there is upside potential with even more new stores planned, but with it I see a lot of risk.

    edit: To add more info, the managing director directly owns over $half a mil worth of stocks, something to take into consideration.
     
  7. finicky

    finicky Well-Known Member Silver Stacker

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    Earnings downgrade a couple of days back, "revised profit forecast of between $14.5 million and $15.5 million", making it pretty expensive on FY14 P/E basis.
    Selling has now pushed it below strong support level of $9.
    The "authoritative" source I earlier mentioned as recommending a buy was Motley Fool Share Advisor. Their Buy recco was on March 27, 2014, and reiterated recently on Tuesday, June 10, 2014

    [imgz=http://forums.silverstackers.com/uploads/1893_trs_june_11.gif][​IMG][/imgz]
     
  8. Miloman

    Miloman Active Member Silver Stacker

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    Just from the charts I see some support but that waterfall gap down, wow waterfall pattern.

    "gaps must be filled in" is a technical chartist adage, But this is a huge spike down and to pick a reversal is difficult.

    I don't like or shop at TRS so I wouldn't buy their stock. Higher volume, lower prices, it's still selling off. My guess is that something is wrong perhaps the market knows more than we do. I wouldn't buy.
     
  9. Caput Lupinum

    Caput Lupinum Active Member Silver Stacker

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    Glad I ended up passing on this one. Bricks and mortar retailers are going the way of the dinosaur slowly not to mention I hate relying on fickle consumers to drive a share price and I'm weary about the local economy in general. I'll pass on things like SUL, MYR, DJS, HVN and JBH for the same reasons.
     
  10. finicky

    finicky Well-Known Member Silver Stacker

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    So still not looking like a buy on the charts.

    I know of three value investment advisors who back Reject Shop at this prices and above, all good advisors but none of them take any notice of market sentiment as reflected by the share price charts : Clime Investment Management chief investment officer John Abernerthy, Intelligent Investor's Nathan Bell, and Scott Phillips from Motley Fool/

    Nathan Bell's commentary touches on these points:
    1/ Average Reject Shop customer spends $10. Shoppers usually don't go online to spend this amount
    2/ Still demand for Reject Shop's merchandise in a recession - maybe more. Growth can continue from more stores 'roll-out'. Reject Shops cost only $90k to outfit

    [​IMG]
     
  11. Caput Lupinum

    Caput Lupinum Active Member Silver Stacker

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    You only have to look at how poorly Big W for Woolworths and Kmart/Target for Westfarmers have been performing in recent times to see the direction that discount retail chains are heading. You can still by cheap crap off ebay from stores that have no overheads so even with postage they work out to be cheaper. The falling $A wouldn't be helping either with their import costs. Again I wouldn't touch bricks and mortar retailers at this point in time.
     
  12. finicky

    finicky Well-Known Member Silver Stacker

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    ^^^

    Well that's looking right so far - closed at $7.10 today down 7%

    No chart reason to buy yet that I can see either.

    Down 24% from the buy recommendation price of Motley Fool. Not knocking Motley Fool Share Advisor, I reckon they're a great bunch and the average of their recommendations over 3 years is beating the All Ords by 3x if you had bought a same dollar amount parcel of the All Ords on the same day as each of M.F's individual share tips.
     
  13. Caput Lupinum

    Caput Lupinum Active Member Silver Stacker

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    I've noticed that Motley pushes certain companies until it's plainly obvious they got it wrong and move onto the next flavor of the month. Seems like every day they are pushing CCL. Anyway, the after Christmas retail figures would be the next major indicator. I wouldn't be expecting a huge turnaround though.
     
  14. finicky

    finicky Well-Known Member Silver Stacker

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    So 10 months on from first post when the eggheads said buy and TRS down 33% at ~$6
    But now back to indecision time - small range indecisive spinning tops. Further down looks the more likely, but not sure.

    [​IMG]
     
  15. Caput Lupinum

    Caput Lupinum Active Member Silver Stacker

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    The other thing going against TRS is the weaker Aussie dollar for their imports
     
  16. DanielM

    DanielM Active Member Silver Stacker

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    Anyone considering buying at this level?
     
  17. finicky

    finicky Well-Known Member Silver Stacker

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    I'm holding off as thinking in investment terms. By that I just mean long term for growth of earnings and dividends. Nothing much to say on a short term trading perspective.
    My main reason for caution is the charts big overhead above the $9 level; I suspect it to be best viewed as a multi-year broadening top formation, so would be looking for signs to contradict that on a monthly chart. Can't see anything yet.
     
  18. DanielM

    DanielM Active Member Silver Stacker

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    To me it seems like a buy, kind of happy I have no cash because I want to but have an uneasy feeling about it, last time I had this feeling westpac was $18.50 a share, but I guess I can't compare WBC to TRS
     
  19. Caput Lupinum

    Caput Lupinum Active Member Silver Stacker

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    Based on what other than the low price, because it's there for good reason?
     
  20. DanielM

    DanielM Active Member Silver Stacker

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    Yes exactly :)


    P.s. I usually do look into things before I post or in general, not to be right or wrong, just to try to not look stupid
     

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