JB Hi Fi Stock Surges As Business Spends Their $20K
According to several analysts including Motley Fool and UBS, JB Hi-Fi was widely tipped to be one of the biggest beneficiaries of the government’s second Federal Budget, which had a particular focus on families and small businesses in an effort to encourage greater spending.
In particular, small businesses with annual turnover of less than $2 million were gifted the ability to claim an immediate tax-deduction on any work-related items with a value up to $20,000.
Senior management at JB Hi Fi have reported strong sales in recent weeks with analysts tipping a buy for the mass retailer despite the stock surging than 43% since mid-October 2014″
“It could still represent good value for long-term investors” claims a recent Motley Fool report.
In a recent trading update, JB Hi-Fi said that it has continued to see good sales momentum in the second-half of the year and confirmed guidance of $3.6 billion in sales and between $127 million and $131 million in net profit after tax (NPAT).
Analysts have told investors that the group’s ultra-low cost distribution network and great staff training and retainment efforts means that JB’s has the most knowledgeable and therefore helpful staff, and among the lowest prices.
A lower Australian dollar has also helped its competitiveness but overall its massive store network and low-cost offering keeps it competitive, versus like Dick Smith who is driving revenue by discounting premium brands. This has resulted in higher sales but flat profit growth.
Motley Fool claims that Harvey Norman, is exposed to the booming property market via not only its own high-quality property portfolio, but also because it’s a one-stop shop for all those people trying to furnish their new properties.
Harvey Norman who does not break out consumer electronics or appliance sales recently moved to trying to secure guaranteed margins from suppliers with Hisense, Teac and Sony agreeing to Harvey Norman demands.
JB Hi-Fi, Dick Smith Officeworks and Harvey Norman are all benefitting from strong demand for items such as laptops, monitors, tablets and smartphones – all of which are necessary devices in many small businesses – with the tax break running through to 30 June, 2017.
As of yesterday JB Hi Fi shares traded at $20.73 they offer investors a generous 4.3% fully franked dividend yield said Motley Fool.