Monday, November 23, 2009

Long Term Play: The Warehouse Group

Chart forWarehouse Group Ltd (The) (WHS.NZ)

I grabbed another 7000 shares of The Warehouse Group [WHS.NZ] back in July when the price came down below 4 bucks. That was for my long term portfolio.

I gave my readers the heads up back in September that there was short term money to be made by buying WHS stock at just over 4 bucks those that took up the offer would have been able to make a good 10% on their money in a few weeks if they timed things right.

The Warehouse share price hit $4.08 at close of business on the NZX last Friday (see chart above) after ditching its dividend the previous week and this investor is watching closely again for the share price to drift back below his buying price barrier so he can add more stock to his portfolio.

First quarter sales have stabilized and a slight rise is apparent for whatever reason.

The stock is a good yield play with over 6% gross PA return on current shares prices and dividend payouts, so it beats term deposits hands down which currently languish at just over 5%.

My interest is clearly going to be piqued at closer to the $3.72 I paid for additional stock in July and I am going to have to use borrowed money this time to secure any possible purchase.

The revolving credit line I have sits at 5.5% floating so when imputation credits are added I am still up on any possible deal.

I am looking at adding 5000 more to take my long term holding to 20000.

The Warehous
e Group @ Share Investor

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  1. wow, borrowing short term to invest long term. That sounds like a recipe for pain or disaster.

  2. Stirrer :) I would be able to pay it back short term. Its a 100K revolving thing so it is suited to the way I invest. Margin lending doesn't appeal.

  3. Why exactly is Kathmandu in the NZX50 index only days after the IPO? One would think that at least a couple of months of trading history should be required to be adequate for inclusion.

    I guess that New Zealand is so void of enough quality stocks that they have to take whatever they can find. I can not remember any other exchanges doing this. It probably says more about NZX than KMD.

  4. I forgot to add. I need not pay it back quickly if i dont.

    Re KMD. It could just as well drop out of the index as quickly as it was included.


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