Bargain hunting at the Reject Shop

Intelligent Investor

Independent Financial Research

Bargain hunting at the Reject Shop. The Reject Shop's share price tumbled last week after a profit warning, blamed on warm weather. It's a familiar story. Pacific Brands is the latest retailer to downgrade its profit forecast and the Australian Bureau of Statistics cited below average retail spending over the past few months. Such dramatic swings are part and parcel of investing in this sector but The Reject Shop faces more challenges than a bit of warm weather. Same-store-sales growth has stalled, competition has intensified, a falling Aussie dollar has crunched margins and in the latest result an accelerated store roll-out program caused net profit to fall by 15%. Then the CEO quit and the stock price halved in the space of a few months. So why did Intelligent Investor Share Advisor recently add this stock to our Buy list, at a time when everyone else is downgrading it? (VIEW LINK)

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Independent Financial Research

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