Another day another 2 retailers post record profits.

JBH (electronics, home appliances) and SUL (leisure, apparel, auto)

Joins the long list of recent profit upgrades in the sector over the last few months:

- DSK (homeware, gifts)

- AX1( footwear)

- PMV (apparel, gifts)

- MHJ (jewellery)

- ADH (bedding, homeware)

- NCK (furniture)

- MOZ (older ladies)

- UNI (apparel).

Are you really prepared to short MYR right now? In this environment? Is the short thesis "every single retailer is pumping out superstar numbers, but MYR cannot?" 

I think MYR will actually produce the best set of numbers in the past 5 years. Their online store is growing faster than KGN and has twice the sales of TPW. 

The "problem" is 8% of the register is short (so 30-60 days of volume needed to fully exit) - these guys are trapped & no doubt panicking. They can't cover too quick or they will move the price up.

We need to squeeze them by the balls so they run for the exits. 

Not sure if anyone saw that happened to a "beaten down" brick and mortar retailer in the US, GameStop, over the past 2 days.

The shorts got squeezed so hard that the share price popped 100% over 2 days.

With ~8% short interest (equivalent to 30-60 days) worth of short covering stuck in MYR and a host of profit upgrades across the entire retail sector (homeware, apparel & cosmetics), shorts would be quite scared.

DSK AX1 NCK PMV MHJ ADH MOZ

ABS retail data for Nov 2020 reported 20% rise in sales for Department Stores. NAB retail data points to a buoyant Christmas.

Importantly, all retailers are reporting GP uplift of 1-5%.

My view is that at $250m market cap, there is at least $100m of NPAT that MYR can generate in FY21 (plus Jobkeeper).

For context, a 2% GP uplift for MYR is 2% * $3bn = $60m NPAT.

In terms of the profit opportunity available on offer for a contrarian investor, 10x $100m NPAT for a P/E of 10x is $1bn, compared with $250m.