Michael Hill International Ltd [MHI.NZX] has been a standout performer over October.
It put on 20% over the month on news that Kim Kardashian is going to be spokesperson for a competition being held to promote MHI in the USA and news that the company had a good sales quarter to 30 September 2010.
The 81c per share MHI is trading at is a 2 year high so takes us back to pre-2008 global crash prices. It is well short of the $1.20 (post a 1:10 share split at approx $12 per share) it was trading at in December 2007 however. This share price was inflated due to the anticipation of that share split and pre problems in Canada and the USA and the overall market exuberance at the time.
The last quarter sales figures are extremely good but that must be tempered with the fact that the most important trading period for the company is the quarter that ends December 31 2010.
Like most retailers MHI make the bulk of their profit at Christmas and we all know that people are just not buying - apart from the last quarter at MHI - and the company needs to exceed 2009 half sales by some margin to justify the large increase in share price.
If it doesn't there will be another opportunity to buy this stock at post Christmas sales in January 2011.
Disc I own MHI shares in the Share Investor Portfolio
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