New Zealand Retail stocks are getting a real bashing at the moment and it seems the market sentiment for this is a lot of media attention about "price slashing" sales before Christmas.
A Hallenstein's store interior
In my opinion though the market has overreacted to the negative news and there are some bargains to be had in retailing stocks.
Hallensteins Glassons, which I'm thinking of adding to my portfolio and has a dividend of over 10% net, hit a low today of NZ$3.84 after hitting the mid 5 bucks earlier this year, while Pumpkin Patch has sunk to $2.60 after almost reaching the magic $5.00 mark only months ago.
Before the High Court dismissal of the Commerce Commission decision to reject two prospective buyers of The Warehouse, its share price was drifting below 5 bucks and that companies sales have slowed and margins contacted and 2008 looks flat to ordinary.
Postie Plus made a loss earlier in the first half of this year and directors are pessimistic for the festive season, while Briscoe Group took a hit to their profit with a 15% dip in recent earnings.
The pressure hasn't hurt the likes of Michael Hill or Restaurant Brand's share prices too much in comparison to others, in fact RBD share prices has gone up while MHI share price has come off recent highs even though profit is up for the year.
That surely shows that market sentiment is punishing retailing stocks down too far.
Its up to you which retailer you are going to buy but it really makes sense to add to the long term portfolio when there is a sale happening.
Related Share Investor reading
Pumpkin Patch profits flatten
New Zealand Retailers ring up costs not tills
The Wal-Mart Revolution: How Big Box Stores Benefit Consumers, Workers, and the Economy by Richard Vedder
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