MRL - Miller's Retail

[Guest]

Hi Everyone!

Is anyone following MRL, a well managed firm owning variety and apparel stores like CrazyClarks, Katies, Crossroads, 1626. They have always paid great dividends and the mangement team is very shareholder friendly. EX-div date comming up (dividends of .04 cents or a 2.8% return, fully franked).

Just wondering if anyone has any opinions on this one?

[GreatPig]

Here's their chart, and Yahoo is indicating a price of $1.46 at the moment.

Cheers,
GP

[RichKid]

Hey!
Yep, MRL is supposed to be well managed and some value managers reckon it's a great outfit but the Warehouse Group is a strong competitor. They've got a new CEO/MD and he's considered to be able to turn things around for Warehouse, hence more grief for Millers. Very fierce competition in this sector. Also, after repeated profit downgrades MRL have taken a hit.

I don't know what a bargain basement value for MRL would be but after the ex-dividend date I reckon it'll drop a bit more as some people may have hung on just for the dividend.

RichKid

[RichKid]

Here's their chart, and Yahoo is indicating a price of $1.46 at the moment.

Cheers,
GP

THanks a million for the chart GP- makes a HUGE difference. $1.50 looks interesting but it appears to be falling back to support at lower levels, just above 1.30

RichKid

[still_in_school]

Hi Guys,

Just analysising MRL (Millers Retail Limited), there due for company results announcements on the 24 August... with an estimated $52m from $60.7m last year, high dividend yeild of 9.5 cents per a share...

On the T/A below, the stock has seems to have found support at $1.38, the RSI is well and truly in the oversold position and the slow stochastic, is well flat... and on the zero momentum...

Market Capitalisation is $335m, and a total debt of about 26%, but with an attractive P/E ratio of 14.08...

Any Suggestion on this stock...

Cheers,
sis

[stefan]

Sis,
Has the dept % increased from last year? If so, by what amount?

Happy trading

Stefan

[still_in_school]

Hi Stefan,

is ok, if you explain to me what dept % means, sorry... dont know to much about fundamentals, more of a tech...

Cheers,
sis

ps... will look up, but still trying to find out what the abbreviation stands for...

[stefan]

Sis,

Don't worry then. I thought you had the figures in front of you. How did you get the

Market Capitalisation is $335m, and a total debt of about 26%, but with an attractive P/E ratio of 14.08. figures in the first place?

I'm after something called debt / equity ratio which shows the relationship between funds provided by borrowing and funds provided by shareholders. The debt/equity ratio shows to what extent a company is financed by debt (also called the gearing or leverage ratio).

Happy trading

Stefan

[still_in_school]

Hi Stefan,

thanks for helping out...

heres the details below...

Capital Structure ($ 000's)
Total Debt 136,689 Interest: 9,939
Interest: 9,939
Long Term Debt 69,519 ( 24% of capital )
Shareholders Equity 215,876 ( 76% of capital )

... on the etrade website, under "quotes & research", you can simply type in the company name or abbreviation, and then it will come up with some sublinks, which will give you exact company details or profiles on all, reports and annual statements presented... the only catch is, you have to be an etrade client... to get hold of this information

Main View | Balance Sheet | Company Overview | Performance & Dividends | Major Shareholders | Printable Report

Cheers & Thanks,
sis

[still_in_school]

Pretty much E*trade provide all the information you need, you dont need to have any stock holdings with them to access this information, just a etrade customer logon, and all the information is free at your finger tips...

Cheers,
sis

[stefan]

Sis,

Thanks. I'm not asking because I don't have access to this kind of information. I haven't followed MRL and so I thought I'd ask you rather than looking it up myself as you may have checked it before.

Anyway, I'd wait and see the end of year report before making a decision with this one.

Happy trading

Stefan

[still_in_school]

Hi Stefan,

just having a look at the market depth on MRL, and there seems to be a huge amount of buyers at $1.38 (actually 23 bidders, and 396,178 units wanted at that price)....

either some insider... or some tip sheet happening, lol

Cheers,
sis

[malachii]

The Intelligent Investor (tip sheet) has had a major buy on this one for ages. They reckon it should be worth somewhere around the $2.50 mark but the market seems to disagree!!! It seems to have a base at between the $1.35 and $1.38. Pays a great dividend though (around the 7% fully franked)

[still_in_school]

Hi Malachii,

thats interesting to know, have a current order set to buy in at 1.39, will be intraday trading this one in and out, but will have the stop loss set in at about 1.31, but dont see it going higher than 1.55, in the short term, profit targets for the short term will be around 1.50 and 1.53... but just sitting here patiently for the stock to just drop a little further....

Cheers,
sis

[Guest]

Hi Sis,

As far as your debt to equity ratio is concerned 24% is an excellent sign. Banks are usually willing to lend up to 80-90%, so that means the firm could look into expanding further (which is what Miller's is doing, going into NZ). The fundamentals are great (been following the firm for long time now), and the intelligent investor crew who recommend the stock have made very many good calls in the past.

I recommend you check out: http://www.intelligentinvestor.com for a free sample of their publication, they do top research and there is a long article on Miller's comming up.

The true story is that the company used to be held by all the super-funds, but since the firm encountered some competition many of them have sold out and the price has dropped to stupidly low levels. It's only a matter of time before the market realises this and the price returns to normal. (There is also the great dividend).

Anyway, you should always do your own research and never forget to look at the fundamentals...

Happy Trading!

P.S. I do hold the stock in case you are wondering, and I plan on topping up my portfolio.

[Guest]

Sorry everyone,
that website is: http://www.intelligentinvestor.com.au

(Cant seem to edit the post)

Thanks

[Nathan_b]

Hello all, how are we?
Just wanted to get some opinions on Millers clothing
have heard different things, some that its share is under priced. but it seems to keep sliding away in price though. Just as a dividend return its archiving a close to 8% return, thought maybe a good time to buy.
just wondered anyone elses thoughts.

[still_in_school]

Hi Nathan,

MRL, is one stock i have been holding on for a long time now... back a few month ago, i bought in at $1.38, i do believe the stock is undervalue, it went ex-dividend on the 7th of October, with a very nice dividend... but the dam stock just wont pick up...

MRL is one stock i have no intentions in selling in a long time, but... it just doesnt move... im just waiting to see what happens towards and after the Christmas break... with holidays around the corner... could very well pick up...

Cheers,
sis

[Nathan_b]

Hey SIS,
yeh i was am looking at its growth expectations, and it looks like it has a lot of potential, and has been higher in the past, looks like it may go north in the near future. just as a dividend it is ok but growth is a bonus.

[Afterglow]

The Just Group is a new player in the same field and is on a lot of must buy lists They own a number of known outlets and brand names and buying more.
MRL was the one I was going to pick though changed to JST , I think they will do very well in the long term, IMHO
I bought in on the 11-10-04 at $ 2.61

[wayneL]

$1.27 looks to be the line in the sand. A low risk buy for bottom pickers by my reckoning.

AS always, do your own research, consult your advisors blah blah

Cheers

[RichKid]

I've been watching MRL for awhile now, it's sufferred as a result of a fierce price war with NZ's The Warehouse Group- and it's not over by a long shot. Margins are tiny and one of them must go or change quick smart- likely to be the Warehouse Group but a new CEO is toughing it out. This is a longterm buy IMO but it may not have bottomed out yet, but who knows, it's impossible to pick the bottom everytime?? I don't know if the price wars will affect its dividend payments either, it really is a fierce fight. It seems from the longterm charts to be heading to about a $1.10. Most people are investing elsewhere in retail since most other retailers are booming (eg funtastic, JB Hifi, Colorado etc). Maybe when the big boys retail cycle ends the lower end will come into play???

Funnily enough (for me anyway) the day before the Reject Shop was to list Miller's announced that conditions were going to be even tougher in the discount variety retail sector- Kinda took the puff out of the reject shop debut but it's recovered since then.

I've heard some brokers complain about Miller's management team but from overall reports they appear to be one of the best in the business- it's just a very tough business to be in!

As Wayne says it does appear to be holding up around $1.27 but there are a heck of a lot of orders at $1.25. Again, I prefer not to buy a falling stock but who knows, it may just shoot up and I'll be left high and dry- no news or figures to suggest an imminent change though

[clowboy]

It does pay a really nice divedend, the question is will it be able to pay it in the future and how much will paying the divedend eat into capital?

There projected eps for FY05 is 9.7cps and dividend to remain at 9.5cps.
Of course there earnings are just an estimate.

[Nathan_b]

Nice dividend??
Its down to $1.22 today. cant belive, dunno how low it will actually go to.
i personally dont see it falling much lower. I could be wrong though!

[malachii]

Nathan_b

Trouble is I said the same thing about this stock when it was $1.38. I have to admit I'm getting very frustrated with it. Especially after days like the last few where I made a decision to sell Mortgage Choice (MOC) instead of MRL and woundn't you believe it the next day MOC was up about 7% and MRL fell another 3 cents.

Man - investing can give you some incredible highs and really low lows!!

Malachii

[tech/a]

No point in getting frustrated with get the hell out of it its costing you $$s

From what I see here most traders are trying to pick stocks that are bottom dwellers.

Like this one.This is the surest way to end your association with trading that I know of!!

Can someone explain to me why people (Well those here)DONT trade charts like the second one--UTB.

Every chart Ive pulled up that is discussed here looks like a candidate for the trash bin.Yet the excitement in some is fever pitched?

Strange that!

[RichKid]

Well you're right TechA some of the charts are very poor. I'm a newcomer to TA and I'm learning slowly but what I've gathered is not everyone on these boards follows TA (eg MUL!). Some of us try to pick the bottom (I've tried this and have promised myself never to do it again- but it's hard work to avoid the temptation).

MRL is going to find life tough IMO as their market is highly competetive and a turnaround is not apparent, either fundamentally or in the share price (Which is what I watch). I'd rather missout on some gains and join when there's an uptrend and a strong signal than guess and buy at every new low (MUL for example, if you look at the longterm trends can 'bottom' further down than it did last month, it just spikes and drops). Eitherway I try to cut my losses very fast to limit the risk, I don't hold and hope.

The other issue is that when a stock is low priced somepeople think you make more than with a $10 stock, even if the $10 stock is trending strongly. Also for people like me I prefer to trade short term and some of the larger stocks take a while to appreciate, this may be something I need to re-evaluate. I personally dabble mainly in well managed junior resource stocks for targeted gains of about 20-30% return (es EXS, BGF) and use company issued options for leverage. Sometimes I stay longer (eg HDR, BMO). AZR and DES are also on my hit list but they aren't exactly flying yet. Things are going to get tougher in a bear market for me.

Anyway too much off the topic here, maybe we should start a new thread on stocks that are trending well and what to look for? Thanks again for your input on TA etc most of us here are beginners. You'll see from some of my posts that I'm very much at the early stages and most of us here are trying to share experiences to improve. I'm still reading Edwards & McGee and the like to learn to recognize patterns. People like WayneL for example mention personal systems which they have developed over a period of time and they stick to it. I'm still getting there but learning alot along the way.

All the best!

[still_in_school]

Hi Guys,

though i do honestly believe, in the fundamental views of this stock.. that there are traders/investors now, and in the future, who wont look at this stock from a technical analysis view, but see this stock and other stocks similar as a way of positively gearing there portfolio.... for the long term, and dividend stream, but also for the stocks like this, because of its and their intrinsic value, but the opportunity of stocks like this, that offer you a passive income... if you were to get a margin lend on similar stocks like this.

Cheers,
sis

[still_in_school]

Hi Guys,

MRL, has had bit of a run in the last 2 days...

i dont think gain it has anything to do technically, but due to the Traders Expo, in Sydney, a few presenters, only a very few, were talking about intrinisic value + similar trading methods to Warren Buffet, still the primary trend of MRL is a long term down trend, IMHO i just believe the stock is having a rally due to to the expo news, but will soon resume its downtrend.

Cheers,
sis

[markrmau]

Everyone thinks mrl is a dog. Probably someone had a look at the recently released anual report and decided mrl had been a little oversold.

I bought some.

Cheers,
Mark.

[still_in_school]

Hi Markrmau,

would you have any idea why people think mrl is a dog stock... im been watching this stock for a long time and holding it, and having the same view, but the MRL instrinsic value vs its market share price... is definite value.. look at its earning and cashflow...

its value for money... or do you think it could be possibly that, people are more after capital gains (share price appreciation) VS a dividend yeild.

though great to see you buy more of MRL, and hope you do very well in the long term, and other MRL holders, but my definiet view is, i believe this is a very undervalued bluechip stock, but will do very well in the future... (very well..)

cheers,
sis

[markrmau]

would you have any idea why people think mrl is a dog stock...

Hi sis,

This is not exactly a scientific method, but

1. Because it has been trending down so heavily since the profit downgrade.

2. I looked up MRL on hotcopper (note: I treat views on hotcopper with extreme caution. Look how much LHG appreciated when hotcopper posters were saying to short it).

3. According to the research page on commsec, the analysts give it: 1 strong buy, 2 hold, 2 sell, 2 strong sell.

I think there is the possibility it is oversold, but won't hesitate to dump it if it starts trending down again.

Cheers,
Mark.

[malachii]

Anyone know why this one is doing the dirty dive again? Was anything really bad said at the recent AGM? I didnt think the news was any better/worse than what they had been saying for the past couple of months.

malachii

[Nathan_b]

Hey Malachii,
I was thinking the same thing today. I am about to do my first purchase of shares, been doin research 4 ages, and am about to take the leap, and i want them cheaper, but am getting jitteres of what the deal is myself, like they been staying in the 1.20's and this is like cheapest now in 5 years.
i dunno.... anyone else know nething? or have anythoughts theyd like to share?

Cheers Nathan!

[markrmau]

Hey Malachii,
I was thinking the same thing today. I am about to do my first purchase of shares, been doin research 4 ages, and am about to take the leap, and i want them cheaper, but am getting jitteres of what the deal is myself, like they been staying in the 1.20's and this is like cheapest now in 5 years.

Hi,
You only want them cheaper if they suddenly then start becoming more expensive. There is no point in buying them if they start getting even cheaper.

I think you should look at what is happening at 12-1 tomorrow. Do a heck of a lot of stocks seem to be going down? If so, then I think things may keep going down for a week or two and you may as well keep clear. If most things seem to be going up, then today may have been an aberation.

I personally have pulled 80% of my capital from the market, over the last week, but I am often wrong.

Other opinions?

[Nathan_b]

thanks for reply mark,
nah i dun want em 2 go cheaper is my point.
lol, its making me a bit warey, i belive they have a good company, and pay a good dividend over the last few years with a lot of potentil in em.
Down to 1.02 as a low today. closed at 1.08. seams cheap, but bit dubious tho of why. something around the corner.

[markrmau]

Well I was 100% wrong about today. Even towards the end of the day I thought there would be serious profit taking in the last 1/2 hour to pair the AORD gain to about .5%.

About MRL: I don't understand why it is dropping so much, so I wouldn't buy it. Obviously something is going on (more serious than a general drop in retail sales), but because we don't know what it is, we can't judge if the market is over-reacting. (Actually, I had to sell my MRL immediately after buying it for minimal profit because it had a 0% loan valuation ratio for my margin loan)

As I said, I am often wrong. Cheers, Mark.

[malachii]

Just received some promo material from the Intelligent Investor which included their latest newsletter. They have been pretty strong supporters of MRL for the last 12 months or so. Until now. They have downgraded it from a strong buy to a hold and standby for worse so that could explain a bit of the sudden rush to get out.

[markrmau]

I see. Actually I just got the 3 month trial subscription and must say I am not overly impressed with it. (My opinion only - any other thoughts?). A quick snapshot seems to point to a number of times they got it wrong - sell ORI, buy MRL for the last 6 months. I am tempted to think that MRL will rebound once the current wave of selling has finished.

[malachii]

Markmau

I acutally agree with you. I think that short of them announcing some really bad news that they are oversold. The dividend return alone in now around the 9.5% return fully franked. The only division that seems to be holding them back is the GO-LO bargain basement type stores. The rest of the company (clothing stores) is actually doing really well.

I should point out that I own shares in this company so this is potentially biased opinion!!!!

Malachii

[malachii]

Well - there you go I spoke to soon - looks like the media is also hot on Millers trail. The following is from todays Australian.


Downmarket stores not merry
Katherine Jimenez
December 03, 2004
THE first casualites of the fiercely competitive Christmas trading period have emerged with investors bailing out of diversified downmarket retailers Funtastic and Miller's Retail amid concerns about their sales and profit prospects.

Shares in Funtastic collapsed 15 per cent yesterday after management dropped a bombshell, warning net profit after tax could be up to 18 per cent below analysts' mid-range forecast of $18.4 million and about $8 million below its $15.8 million profit last financial year.

Investors slashed 39c from its shares to $2.19 on heavy turnover.

Funtastic blamed a mistake with its foreign exchange hedging which would crunch margins in the second half by about $3 million, as well as weaker than expected sales due to a "softening" market in October and November.

But Funtastic's commentary was in stark contrast to other high-profile retailers.

Harvey Norman, Woolworths, Coles Myer and David Jones have all reported strong trading during November and are upbeat about the whole Christmas trading period.

Investor unease is also building about Miller's -- owner of discount variety stores Crazy Prices and Go-Lo and womenswear chain Katies.

The stock has been sliding since management revealed last Friday that first-quarter sales were still under pressure from competition but the slide has been particularly sharp in the past two days.

The stock fell yesterday 8c to a four-year low of $1.08 with 2.8 million shares trading. It is down 40 per cent this year.

Sources have suggested there could be more to Miller's problems than just increased competition.

In May, Perennial Value Management dumped its 8.6 per cent stake because it believed there were deep-seated problems within Miller's company that had not yet come to light. Perpetual Trustees Australia has been selling down its interest over the past few months.

But Miller's chief Gary Perlstein has repeatedly attributed the poor sales and profit results to the price war in the $4 billion discount variety market, which represents a big slice of its total group earnings. He has been particularly critical of rival New Zealand's Warehouse Group, which he says created the price war through its mistakes.

But Miller's apparel business has also underperformed and it appears that space is likely to get tougher for Mr Perlstein and his management.

On Tuesday, Target -- owned by Coles Myer -- said it would tighten the screws on apparel specialty retailers.

Analyst feedback on the Target store tour on Monday was very upbeat.

Citigroup Smith Barney wrote: "Target is on a roll. Based on today's fashion trends, the product is rich in diversity and depth."

Target said it planned to increase its direct sourcing from Asia and increase its presence in the country.

Citigroup said Target still had good growth opportunity through better average selling prices, higher sales per square metre and country stores.

Analysts' report cards on Officeworks was also positive.

Coles Myer's shares rose 1c yesterday to $9.79.

[clowboy]

I must admit it has been quite some time since I looked at MRL so I could just be dreaming but...from memory I thought that there last DIV payment vasically came from cash reserves (and hence used a large chunk of it), with things not really looking better in terms of profit how will they be able to maintain these kinds of dividends?

Personally (IMHO) it is probably a stock that will contiune to fall until (if ever) a takeover bid is placed.

With giants like coles to contend with I wouldnt wont to be on the millers board.

Just my two cents.

[RichKid]

I must admit it has been quite some time since I looked at MRL so I could just be dreaming but...from memory I thought that there last DIV payment vasically came from cash reserves (and hence used a large chunk of it), with things not really looking better in terms of profit how will they be able to maintain these kinds of dividends?

Personally (IMHO) it is probably a stock that will contiune to fall until (if ever) a takeover bid is placed.

With giants like coles to contend with I wouldnt wont to be on the millers board.

Just my two cents.

My view is similar to yours, THEORETICALLY millers now has a high dividend yield but that's based on past news, if they are in so much trouble can they really pay a decent dividend next year- where's the money coming from!!!??? In which case what's the point in investing in the co if it's not making you enough money and it is also falling?? The intelligent investor seems to be upbeat about MRL management and have been positive on it all year- they say they are long term investors but they also do get it wrong. I'm just going to wait to see how this pans out, the warehouse group really has hurt milllers too. I don't want to put money in a falling stock and then wait two years for it in case it recovers. Better risk profiles elsewhere IMO.

[RichKid]

Currently just above $1, if it falls through this week I don't see solid support till 60c, may waver at about 92c. I'm just looking at significant price movements but there isn't anything definite there in my view to support the stock. This stock is definitely out of favour just a matter of how long it falls or the time before some good news emerges. A takeover seems the best prospect but I don't know much about the industry, retail conditions aren't going to improve much more than from the present IMO.

[tech/a]

MONKEYS Pick BOTTOMS

[rozella]

Markmau

I acutally agree with you. I think that short of them announcing some really bad news that they are oversold. The dividend return alone in now around the 9.5% return fully franked. The only division that seems to be holding them back is the GO-LO bargain basement type stores. The rest of the company (clothing stores) is actually doing really well.

I should point out that I own shares in this company so this is potentially biased opinion!!!!

Malachii

Their dividends are 9.5/share (yield 9.22%), but their earnings are only 3.6/share

rozella

[RichKid]

There was a comment in the AFR (first week of December) that a large institutional investor had told MRL to reduce its debt instead of assuring investors of dividends- no word of either being guaranteed. Very Very risky atm.

[RichKid]

There it is, no divs from MRL, sound decision but market conditions are tough and the stock is no longer attractive to div chasers. Marked down heavily but it's not over yet, recent rounding top, the fall continues. Good one to short with market conditions not expected to improve in the near term but always a chance for a predator to gobble it up. Might settle around 80c short term if past price action (1999) is anything to go by but this time it's going down not up.

[clowboy]

I couldnt for the life of me understand why they paid the last dividend yet alone how they thought they would be able to pay the next.

I think MRL will only continue to spiral downwards until they have some good news.

It could be good as a takeover but I wouldnt want to be holding it in the hopes that a bid is placed

[doctorj]

On the doctorj barge-pole-o-meter, MRL lies somewhere up the far end with Chemeq...

[wayneL]

barge-pole-o-meter.

LOL, Where do I get one of those!

[Tric]

yep, agree wayneL LOL too

it's a classic, love it:

Originally Posted by doctorj
barge-pole-o-meter
put me down for one too doctorj

But have to say what a great bounce for mrl today, day/shorts dream trade with close at .99 (15.12% gain). I got in & out frid with good 5% gain, who would have guessed (yep guessed!) it would do this today.

[Tric]

well, amazing week for mrl with the jump & large buyup..., had many of us wondering about a Brazin comparison.

ceo Gary Perlstein now has 15.82%.
all makes you wonder with profit downgrades, price plunges & buy up.

[Nathan_b]

What does everyone think of their new low? 68 cents, what do you feel will happen to this company over the next 12 months... takeover perhaps? Just interested in thoughts.

[markrmau]

The chart is absolutely appalling. It could turn around, or it could go bust. I would look at djs before mrl, - djs has good management. I am looking to get back into djs when it seems to have a sustained uptrend.

Interesting to note that the p/e and div yeild are comparable, suggesting that either mrl is overvalued or djs is undervalued.

[RichKid]

Is this a rounding bottom? Volume isn't perfect for the pattern and it is a bit different to the classical pattern but a lot of volume during this recent run, higher bottoms. Running into resistance now at 80/82c. An ascending triangle in the last few weeks? Could be as vol has tapered off. Too erratic a fundamental profile for me to enter as there are better candidates elsewhere.

[It's Snake Pliskin]

Yes Richkid,

The fundamentals are too erratic and unpredictable. The company has fallen big time over the past year and may not go anywhere soon.

I think the future prospects of this company would be the defining factor in deciding wether to buy or not. If the economy holds up and people start spending money more, it might be enough to pick the company up - providing management has its act together. A long term spec buy at this stage I think. :)

[Lachlan6]

Decided to open up a new thread on this one. Tricky to say where they will will go from here. Looking at the daily chart is really a positive turnaround picture, with resistance broken at 97c. Some nice volume in the last week or so as well. I always look at the medium to longer term picture though to maximise return and the weekly chart is a hard one to read. I have put down important resistance at $1.09, and if this is broken may and I stress MAY be the beginnings of an uptrend. Its soo tricky as there has not been that much accumulation and the bottom pattern is hard to recognise. Maybe reversal head and shoulders. Possibly may come down again and may be forming a double bottom, probably more likely. Still reckon its too early for Millers to run as management are only still restructuring the company. OBV supporting this little rise nicely, showing people may be starting to jump back on board. Would love some opinions from other techies on Millers. Cheers, Lachie.