Question: JBH has been going down since I bought it a couple of months ago. It’s now down 12%. Should I hang on or sell?
Answer (by Paul Rickard): I really like the stock, but it has gone out of favour with the market over the last month or so.
I don’t think there is any stock specific reason, rather just a bit of de-weighting from the sector, as fund managers ponder the impact that Amazon or others could have on discretionary retail stocks.
The analysts are positive on the stock, with a consensus target price of $30.76. This is a 28.3% premium to the current price of $24.00.
Pricing metrics are attractive – trading on a multiple of 13.1 times FY17 earnings, forecast fully franked dividend yield of 4.9%.
If you can wear the pain, hang on.
Question:Could you please tell me if some of the stocks in the growth and income portfolios that are less than the December 16 prices are still a buy in the different sectors?
Answer (by Paul Rickard): It is a model portfolio – with emphasis on both words. The assumptions around the model are critical.
As it is a portfolio, I am reluctant to say “buy this” and “don’t buy that”.
In Monday’s Switzer Super Report, I singled out JB Hi-Fi and Ramsay Health Care [1] as stocks that offer good value opportunities.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.