The Warehouse Group Ltd [WHS.NZX] like most other listed retailers, is on sale at the moment. The Warehouse stock has lost almost 12% in value since December 2010, around 8% of that loss over February alone, to close at $3.38 today.
Much of that loss has been due to a negative trading update in early January but the share price has come under pressure over the last 2 weeks as post Christchurch Earthquake 12 stores in that region will have compromised sales for some time and two stores will be shut indefinately because of structural damage.
There is also the prospect of lacklustre trading for at least another year as the New Zealand economy continues to bite hard on retailers of all persuasions.
Having said that the company is paying a rather attractive gross dividend of over 13%, with a net dividend of greater than 15c per share coming up post the March 12 profit announcement.
The prospect of another CEO taking over from Ian Morrice in the latter part of 2011 and changing the current flagging fortunes of the company is a possible bright spot on an otherwise darkish medium term horizon.
The current share price is 8c off a 52 week low of $3.30 and over the last year the stock has rallied from these levels 3 times so a short term gain could be nade as well as a relative bargain for long term investors like me.
Buy on further weakness. I will be looking
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Disclosure: I own WHS shares in the Share Investor Portfolio
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NEW - From Fishpond.co.nz | Think Bigger, By Michael Hill
c Share Investor 2011
