This time last year - The Reject Shop

Next week Joe Hockey will hand down the Federal Budget and many are hoping he will have learned a few lessons after the 2014 fiasco. If we wind back the clock to this time last year Mathan Somasundaram, Quant Strategist at Baillieu Holst, highlighted the Reject Shop as a stock likely to be impacted by the budget along with the falling currency and unemployment (VIEW LINK). “We maintain our Quant Sell rating on The Reject Shop (TRS) with a Quant Target Price (QTP) of $8.00 [last price $10.13… The next year is likely to bring a falling currency, higher competition, rising unemployment and budget cuts to further dampen consumer sentiment.” Since these comments were made TRS has fallen over 32% and at one point traded as low as $5.40 (see chart). It will be interesting to see if there will be clear winners/losers this time around – I’ll see what I can dig up and interested to hear any views/insights. No doubt instilling some level of business and consumer confidence will be key.