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MTS - Metcash Limited

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finicky said:
But Metcash's business performance has been improving lately so they say and the share price has been showing some resilience, although has not broken longer term downtrend yet. Both Market Matters and Greg Canavan think there's value there.
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I recently bought although that's intended as a trade not a long term investment. Time will tell, I could always be wrong there....

Thinking longer term though one thing that does come to mind is regulatory risk. To the extent there's any, I'm thinking that would favour anyone who isn't Coles or Woolworths given the big two are somewhat of a target of sorts.
 
Putting this as up for the April tipping competition, a bit of an unusual pick with a fairly range bound and boring chart, but I can't help but wonder if they might be a target for an overseas player to make a bid on.

We've heard for a long timer that foreign players are looking at a way into the Australian supermarket segment, maybe Metcash will be that.

Combined with a weaker AUD and a weaker outlook in the US, maybe the time is right for a bid to appear.

Pure speculation though and I don't hold.
 
peter2 said:
Yikes! I'm not going to even try and explain todays selloff in MTS.
COL and WOW both went up today.

View attachment 197049
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easy, was late to the sell-off , and has a diverse range of franchises , groceries might be strong but they do hardware , car parts , liquor outlets and more .. lots of supply chains to develop disruptions

i need lower yet before i buy extras
 
Smurf1976 said:
Likewise, I'm still trying to work that one out.

At least my stop loss worked.
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think of MTS as a wholesale distributor ( to it's franchisees )

now some franchisees are real gems , but odds are some will be under pressure as consumers struggle

IMO i do not think this is a bad thing , more like MYR ( in structure ) than COL or WOW

i hold COL and WOW both at no cash risk , and MTS
 
just checked the current parcel i hold was bought at $2.96 ( and since i got scorched on the previous saga with MTS ) i will be VERY CAUTIOUSLY averaging down this time
 
MTS has rebounded since the general sell off in early April, returning to levels last seen in December. Unfortunately my previous entry was a few days premature, stopping out almost immediately and I haven't re-entered since. I still cannot shake the feeling that there is external interest in a potential takeover, but that's just pure speculation.

Watching how it behaves as it re-enters this price zone.

 
Further strengthening of Hardware pillar FY25 earnings update

i hold MTS

probably won't dip enough to tempt me to add to the holding
 

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Metcash doing nicely thank you very much.
Operating cash flow up 11% is very good,
Even the hardware sale are on the improve.

Dividend announced today at 0.095 CPS.
Both Coles and Wooliea are in trouble with the ACC over fake discounts, so perhaps rotation to MTS is understandable.
One hopes this continues.
Mick
 
( i hold WOW , COL and MTS )

am a COL and MTS shopper , MTS ( in the two stores i use most often ) are a better shopping experience the prices ( on what i buy ) are comparable , the stores normally less congested

interesting to note that tobacco products are lagging , and am wondering if that is bad thing , those products are getting very expensive ( i don't participate in that vice ) so stocking them would tie up capital and the extra costs involved in selling them , maybe they will move the tobacco products to be exclusively sold through the alcohol outlets and trim costs that way

look for MTS to continue to trim logistics expenses

since MTS is largely ( at the core ) a wholesale distribution service , look for a small 'bolt-on ' by buying some distressed minnow outlets or a small manufacturer

eventually COL and WOW will come back to focus on their primary business , so can MTS bulk up enough to give it some margin cushion before then ?
 
Market Matters this morning

Market Matters | Leading Australian Stock Market Views And Advice

Get the latest Australian stock market views from top investors with real money in the markets. ASX investment advice and share recommendations. Find out more.
marketmatters.com.au
/report/the-match-out-stocks-experience-only-mild-reaction-to-us-strikes-on-iran/

Not Held

Metcash (MTS) $2.80

"MTS +2.7%: Delivered a strong FY25 result broadly in line with expectations. Underlying profit was slightly down on the year prior, however the struggling Hardware segment showed strong signs of a turnaround.

Sales of $17.32 billion, +8.9% y/y, estimate $17.93 billion
Hardware revenue $2.68 billion, +8.3% y/y, estimate $2.64 billion
Final fully franked dividend of 9.5 cents per share
Food was the clear outperformer with strength across the IGA network, while Hardware benefited from strong trade and DIY demand. The business is showing positive signs of momentum with total group sales increasing 4.7% in the first seven weeks of FY26 (operating in a May-April financial year).

We are pleased by the momentum and continue to hold the stock in our Active Income portfolio.
MM remains long and bullish MTS"
 
A short comment from Greg Canavan dated 24 June from his subscriber article titled, "How to Avoid the Stinkers"

Greg Canavan – Fat Tail Investment Research

Our Editorial Director Greg Canavan is determined to put bias aside and focus solely on charts and fundamentals to value investment opportunities. Find out more
fattail.com.au

Not Held by me

He contrasts MTS with HLS and NUF. My bold:

" .. In contrast, with food, liquor and hardware wholesaler/retailer Metcash [ASX:MTS], we had to endure a weak share price for some time. But its return on tangible capital was healthy (between 16 %–20% in recent years), and I believed the problems it was experiencing were cyclical.

It’s not the highest quality business. But it has a solid market position and generates strong cashflows. So you know buying at the low point of a cycle is a higher probability bet than, say, trying to pick the bottom of the lithium market.

MTS reported full- year results this week. Sales growth was decent in a tough environment. More to the point, the share price was depressed leading into the result, so it’s rallied nicely recently. Since the March low, MTS is up nearly 30%.

While the price will need some time to consolidate these gains, the valuation still looks attractive. Based on FY26 numbers, return on tangible capital should come in around 20%, which is healthy.

With lower interest rates set to buoy spending in the second half of the year, I think MTS’s recovery will continue. After such a strong rally though, for now it’s a hold.

As Buffett says, time is the friend of the wonderful business. I wouldn’t put MTS in that category, but if you buy it at the right price, just sit back and let time do the rest. In an impatient world, patience wins."
 
MTS continuing to grow in my portfolio.
The good annual results have been followed up by a recent trading update for the first 18 weeks of the new fin year showing adrop of 32% in tobacco sales, which I think is excellent.
The rest of the business has seen sales up 5.1%, driven mostly by sales in food, with hardware lagging.
Happy to keep holding.

Mick
 
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