Does ‘Mr Market’ really know all, and is he as efficient as some would have us believe. Don’t think so.
Take specialty retail which has been badly hit by lockdowns thus far this financial year.
The 1HFY22 results will reflect the many thousands and thousands of trading days lost.
If Mr Market is so smart, why has he been so ‘skitzo’ when pricing the markets.
And yeah, I get it, there are a myriad of other reasons impacting on share prices. That aside, there are some doozies of differences here.
My summary of the reported revenue of 9 specialty retailers for the period (roughly) of the lockdown went from Nick Scali (NCK) who reported revenue ‘in line with FY21 comps’ to Michael Hill Jeweller (MHJ) whose Australian division reported revenue down 24.9%.
With NCK, fair enough, Mr Market has rewarded it with a 32% SP gain since 1st July.
But you’d think Mr Market would be taking master Michael Hill (MHJ) behind the wood shed for a damn good birching, wouldn’t you?
No, master Michael came back with a bag of lollies and a 30% SP increase too.
Same with Kathmandu (KMD) – went missing in the lockdown and recorded a 17.6% revenue decline. Surely six of the best is deserving, but no, the Sherpa lover gets a small 3% share price increase.
The report card for fragrant fancier Dusk (DSK) showed a woeful 22.9% revenue decline and on this occasion Mr Market meted out a 3% SP decline.
Apart form NCK, only Shaver Shop (-0.9%) and Beacon lighting (-4.7%) went anywhere close in making FY21 comps and the arithmetical average for the specialty retailers was -11%. See list below
NCK – In line
SSG - -0.9%
?BLX - -4.7%
?JBH - -7.5%
?ADH - -8.5%
?SUL - -12%
?KMD - -17.6%
?DSK - -22.9%
?MHJ - -24.9% (Australia only)
My Conclusion on Mr Market – just like as in school, there are favourites and there are those to be made an example of. I'm pleased to hold SSG and ADH.