Halfords Share Discussion Threads

[kendonagasaki] 07/1/2020 12:11

Just opened long Stumpy.Stop at 152, expecting volitiity.

[stupmy] 06/1/2020 16:07

Price wise it's not looking pretty. 157/158 looks likely now. I'll consider adding at that point.

[yump] 06/1/2020 14:56

Interesting posts.

niggle

I think you could put a little more effort into the price target though otherwise you'll never get a job as an analyst. Perhaps a target of 121p ;-)

Have seen wild goodwill figures all over the place over the years - some in businesses much smaller than HFD - think its any future impairments that suddenly do the real damage ?

I still haven't bought any as I just can't see anything surprising happening in the business on the upside - at least not short term. Guessing the possible turning point in advance isn't easy though, the problem is working out when its various businesses will collectively level out.

PETS took off from just the one slightly positive update from memory so perhaps just a case of taking a view of value and spreading buying around the dips, then waiting.

[rmillaree] 06/1/2020 14:11

Niggle has raised a very good point here.

Historically most bods have been happy i think we would agreed to base the shareprice on a reasonable p/e. Back when i last held debt was less than 2 years profit and the level of profits being made was such that the solvency of the business was never really a concern.

I think now with profits trending lower and lower each year - the bullet proof previous solvency isn't so bulletproof anymore - particularly with the fact that the main assets of stock and plant can't be sold while the company continues to trade as these are necessary to earn their crust. So if its a case that the company is only making £30 mill profit a year and they owe out nearly £300 mill and they have nothing they can sell they are very reliant on the support of their lenders and "trade suppliers" = for companies like SCS/HMV and Game they ran into this issue that suppliers didn't feel comfortable giving their credit and being frank the trend in Halfords earnings historically is pretty clear for all to see - so i think a much lower p/e is now sensible for this business than was the case back in the day - note this process can also work in reverse if the company can get out of the rut and raise earnings.

[stupmy] 06/1/2020 13:11

niggle, with respect to interpretation of intangibles, I have to agree that what you've listed isn't very important and it would be wise from the point of cautiont o strip them out (although I have not checked them myself). From a service perpective, I think that their brand is likely to be important. I also thought that they would have been wise to cut the divi further than they did.

Howevever, could you explain where your figure of 100 comes from for the shares.

[skinny] 06/1/2020 12:52

spob - can you update the and links in the header.

[poikka] 05/1/2020 14:10

Chuck in the strengthening £ - was, at least...

[supervalue] 05/1/2020 13:54

Kendonagasaki and others are pointing out 80% of business is retail. However, Autocentres currently represent 15% of Profit and 16% of Revenue. The plan is to invest into Services to the point where they double in terms of the proportion of revenue they account for. So this will then account for around a third of revenue and profit for the group. Autocentres profit is up 20% for this half year on year. However, using alternative measures that the board feel are more useful, it is up 65% (EBITDA). These alternative measures remove non-underlying items and do not include stores that have closed or have been running for less than a year. This seams to me to be reasonable. So retail will (according to plan) represent two thirds of the business. Retail is not doing terrible considering the general climate in retail. Plus in the last 6 weeks prior to December update I believe they have moved back into growth. If Autocentres moves towards accounting for a third of the business, and is getting anything like 65% profit growth this looks pretty good to me.

[stupmy] 03/1/2020 12:25

I've entered my first position at 169.5.

[stupmy] 03/1/2020 10:58

Well it was kind of a target, but not in the sense that I want to buy at that point. It was price action business that I need resolved before paying attention. I've spent a lot of time away from my screens recently as I have not had compelling reasons to enter/exit on the whole in any position. I hold zero HFDs having dropped everything around 178 from memory. I'm still viewing it as a trading opportunity and looking for re-entries. I just want some form of evidence that it's going to rise rather than fall. It would not be a surprise to see the targets I've spoken about above in the near future. US markets selling off now (futures). We're entering a period of potentially significant instability and 'when a barn burns down, the pretty horses come runnin out with the donkeys'. Might be a period during which we should be nimble and careful.

[toffeeman] 03/1/2020 10:33

I can buy at 168.077 - too far from your target Stumpy?

[stupmy] 03/1/2020 09:59

Well price has hit my 168 an dis sitting just under it. I'm working on the principle that the chart will be useful to me and am waiting to start to re-enter. As you say Kendo retail was reportedly down in general by 10% over the christmas period. If that's true it's hard to imagine that HFDs bucked the trend. I'm waiting for a buy signal to start re-entering. However, there may be some support between 164 and 166, or there is also a rising tl resistance (daily chart) that is currently around 157. Judging from yesterdays daily candle there was some buying interest around 167/168. For me for the moment it's still a waiting game, but I'm paying more attention.

[kendonagasaki] 02/1/2020 10:08

Xmas was poor for many retailers. 80 percent of the business is retail.I don't have a clue how their Xmas trading period went?If poor there is some downside to e enter at a better price, if you believe their is potential to grow.

[argylerich] 30/12/2019 16:40

Agree re size of business Stupmy, although even at this size it will have growing beneficial effects on margins of products for the whole car side of the business, added to their new buying tie-up and the improving outlook for the £.
I think you could see your 166, or even slightly below. The RSI is due an oscillation.

[stupmy] 30/12/2019 14:44

I'm still waiting for price to hit 168. Not necessarily the bottom, but a point at which I'll start to consider re-entering. Don't forget that service is only 20% of the business, retail is about 80%. Agree that service seems to be an area of strength.

[argylerich] 30/12/2019 14:26

Topped up today after buying back in at 160. With the growing success of the Autocentres and the further expansion into this sector of the market, hopefully now we've turned the corner with far more positives to come and the negatives already (over?) priced-in.

[mr bennn] 21/12/2019 01:37

So will Stapleton and his leaders. But he will have to think of something else to blame when Brexit is over. He will be back to blaming the weather I suppose...

[stupmy] 19/12/2019 13:20

I thought I might get my 168 today, but it looks like not, maybe after xmas. There are few shares that look like they need a 5% drop to the down side, HFD, WMH, Barc, probably others.

[w1ndjammer] 19/12/2019 11:44

In the meantime i am happy to collect my 7.5% dividend for next year.....

WJ.

[yump] 18/12/2019 13:08

Looks like there will be plenty of time to assess this and buy in for any longer term rise. Perhaps wait for post-Christmas update, I can't imagine there's going to be a boom in bike sales, although the weather has probably jumped the auto services side. If the mood in the country improves with Brexit in the New Year, then perhaps the discretionary purchases will jump in Spring. Add in some permanent strength in sterling for cheaper imports and the combination could be good towards the end of next year.

[poikka] 15/12/2019 14:25

Depends on just how much the £ rises and for how long.

[stupmy] 13/12/2019 12:32

I'm happy to have dropped everything around 178. I think the share price will come back to 168. My guess is that the election effect will be short lived. Might not end up being good for UK business either in the short term due to Brexit. I think Brexit has taken a back seat to relief at the menace of Corbyn being removed.

[yump] 13/12/2019 12:10

According to staff, kids bikes fairly quiet although there's always a last minute rush. They've had a reasonable number of orders online to get bikes ready, but actual store footfall is low apparently. Just a guess but if its like the general move to online, people are just looking at the bikes online and ordering for collection in store.

The implication of that is that there is excess store space because fewer people are going to look at bikes in-store.

Presumably they are tracking sales both in-store and online. If they are logging rough visitor numbers to the in-store bike areas they should be able to compare the two. In theory if the cost of store space and stock exceeds the profit from store bike sales...

I can be a consultant for Halfords, go on, gi us a job.

[stupmy] 13/12/2019 09:55

I'm clearing the decks for xmas, there will be plenty of opportunities next year and today has given me the opportunity to get out of this one clean. If it falls back I'll look again. WMH looks interesting. I've started with that again (yesterday)