Question: Will you be making any changes in both portfolios in December and January and what is your opinion on JB Hi-Fi?
Answer (By Paul Rickard): Yes, I will be making some changes – although they will be in the “moderate” category.
Firstly, I will be re-balancing the weights across the sectors to reflect an updated view of the sectors. I will also look at some of the stock biases – for example, in the banks, increasing exposure to the Commonwealth Bank (CBA) and reducing exposure to NAB, and in materials, increasing the weight to BHP at the expense of RIO.
I will probably also cut out a couple of stocks that haven’t performed and the market has taken a very dim view of, such as UGL.
In relation to JB Hi-Fi, I think it is a very well run company – probably the pick of the Australian retailers. They have had a fantastic run up in share price, which to be honest, I missed.
While I am very bullish about the Christmas season this year (anecdote only, no data yet to support) – the question is, however, is this already priced into its share push? For what it is worth – the consensus broker target price is $17.46.
Bottom line – I am inclined to think I have missed it with JB Hi-Fi and I don’t think I am going to chase.
Question 2: What are your thoughts on NEXTDC (NXT)? It seems to be doing nothing but falling. I have some shares at $2.60. I just don’t know if I should hold or sell and cop the loss.
Answer 2 (By Paul Rickard): I really can’t offer you much insight on NEXTDC.
It had a great run up – possibly too quick – and looks like it has some support around $2.00.
The company appears to be delivering on its commitments – obviously, the vote on the remuneration report has caused some issues – however, there is nothing that I can share to offer further guidance.
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