Stock of the Week: Michael Hill International

In this Stock of the Week I am going to look at the multinational Jewelry retailer Michael Hill International [MHI.NZX]

Like every other business and especially retailers, Michael Hill is suffering somewhat from the economic downturn, its results to 31/12/08 that, but this company has a long history of good returns to shareholders and spectacular revenue and profit growth and the drop in profit will not last forever.

Over the last year or so the company has shifted its direction from a pure jewelry discounter to a more upmarket player, with its own branded watches and a range of luxury branded products, starting with Michael Hill Perfume.

Expansion from its present base of over 230 stores is on the cards with a goal of 1000 stores by 2020, the bulk of them being in North America, which kicked off in Canada a few years ago and entered mainland America at the end of 2008 when MHI purchased 17 stores in Illinois and Missouri from Whitehall Jewelers who were in Chapter 11 Bankruptcy.

Of course this is risky, there are many retailers that have washed up on the retail rocks in the land of the free because of unwise and unsustainable expansion, many of them in 2009, but Michael Hill's (the man and the company) expansion strategy up till now has been carefully calculated every step of the way and so far has paid off.

Canada has proven a tough nut to crack thus far but prospects were improving until the recession hit late 2008.

Michael Hill (the man) thinks this is a perfect time to expand and I am with him there - cheaper start-up costs makes for a good base to grow from and gives leeway to get through the tough times.

Which brings me to the share price. The stock hit a low of 45c earlier this year but has risen up to 69c market close on Friday. The stock has been as high as $1.25.

I am looking at buying more on share price dips, and they will come.

Good Luck!



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c Share Investor 2009

Mt Albert By-Election win a Turning Point in Labour Party Leadership

Congratulations to Labour's David Shearer for winning the Mt Albert By-Election by a landslide tonight.

He beat Melissa Lee from National, by a far larger majority than Helen Clark beat the National Candidate in the November 2008 General Election.

What does this tell us?

Well, it says that Shearer is a popular fellow, albeit in a safe seat a Labour party Monkey could win but what it also says is that Phil Goff's days as Labour Party leader are numbered.

With Helen Clark polling lower than Shearer and with Goff a part of Helen's old 2008 team the writing is on the wall for Goff. He was and is part of a dying Labour under Clark and now him and Shearer is its future.

The big win tonight really is the turning point for Goff's leadership and a grab for the top job cant be far off for Shearer and what will be his new team.

Goff simply cannot beat John Key in the 2011 General Election but after tonight Labour Party hierarchy will know for sure that David Shearer will have a much better chance.

Tonight's result has not been good for Phil Goff but it has been great for Labour's chances come 2011.

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c Political Animal 2009

LIVE: Mt Albert By Election Results - Final Results

Even though it might seem the results are a fait accompli, you can get Mt Albert Election day results here at Political Animal as they come in.

It aint over until the fat politician has his hands on your money.

By-Election Results -- Mt Albert (Final results)

Electorate Number: 26   Final: No Polling Places Counted: 30 of 30 (100.0%)   Votes Counted: 19,992 Less than 6 votes taken in Polling Places: 0   Special Votes: 1,114 Leading Candidate: SHEARER, David (LAB)   Majority: 9,187   Candidates BAGNALL, Jim IND   22 BAKER, Ari IND   15 BOSCAWEN, John ACT   943 BOYCE, Ben B&B   151 DYER, Simonne KIWI   85 FRANCE, Malcolm PBP   13 GREEN, Dakta ALCP   85 KANE, Rusty PCP   5 LEE, Melissa NAT   3,426 NORMAN, Russel GP   2,418 PISTORIUS, Julian LIB   35 SHEARER, David LAB   12,613 TURNER, Judy UFNZ   82 VAN DEN HEUVEL, Anthony Joseph James HR   14 WOOD, Jackson James IND   9 Candidate Informals   76 TOTAL   19,992

The Chief Electoral Office aims to have the official results for the 2009 Mt Albert by-election published here by noon Wednesday 24 June.

c Political Animal 2009

Contrarian Investor: Doris Mousdale

A few months ago I decided to get all Pollyanna-ish, to stop writing about the economy in the doldrums, because it is going to do what it is going to do and instead focus on stocks, business and as some in the financial world say look at things "going forward". The contrarian investor approach if you like.






Doris Mousdale

A positive spin, because I am sick of the mind numbing daily focus, usually inaccurate and at its worst pure guess work, of talking heads telling us how bad it is and how long it is going to last.

With this in mind I am going to do a series on people or businesses that are doing the opposite to everyone else.

Growing instead of retrenching, starting business rather than closing and hiring instead of firing - you get the picture.

I suppose I was inspired by Michael Hill's interview on 60 Minutes this last Monday where he told us that he was more positive and excited about his Michael Hill International [MHI.NZ] Jewelry business than any time in his life.

The man is looking at the global economic downturn as an opportunity to expand, get cheap retail sites and reach 1000 stores by 2020.

With this positive theme in mind lets take a look at the book business and one person in particular that has been in the business for many, many years, Doris Mousdale.

She has had positions with Whitcoulls, Dymocks, Real Groovy. Made redundant from her position with Dymocks in April she has decided to open up her own bookstore, Anthology, in Auckland's Newmarket shopping district.

Now with a very competitive book market in New Zealand and with book chains downsizing, shutting and moving head offices to Australia, Mousdale certainly has taken the bull by the horns and gone in the opposite direction.

She thinks her personal touch as an owner operator and experience in the book industry will mark her out from other book retailers:

"I'm feeling quite confident about it, I think the independent bookstore has a lot to offer the surrounding community. There are still people out there who want the next best read, and they want it recommended to them." See full story.

I think she is right. A point of difference is crucial to survival in business, especially in retail, especially in the cut-throat book biz and most certainly during an economic downturn.

Mousdale has a niche to fill - experience and personal service- because she cannot compete on price and title range with the Borders of this world and her move to position herself where she is , is canny to say the least.

This comes on top of a broad downturn in all retail and a movement away from pricier entertainment and gift giving to more affordable product like a book to read or a movie ticket, instead of that weekend way in Taupo.

If Doris can get through the tough times, her business is going to go from strength to strength and she has certainly chosen a opportune time to make her mark. Contrarian investors have almost always had better returns than those who go with the crowds, as their start up costs are always cheaper -in Mousdale's case with on going business expenses negotiated at a time when relative bargains can be had.

Good luck to her.

Related Links

Doris Reviews Books - Leightonsmith.co.nz

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c Share Investor 2009