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Re: [sharechat] Re: WHS - What's happening

From: "Pete Stevens" <>
Date: Thu, 31 Jul 2003 18:38:14 +1200

Hi all,

The thread below prompted me to do some further research into WHS's
fundamentals(mainly to figure out how Snoopy got 14% yield), after which I
decided to purchase WHS shares.  One thing that concerns me though, is the
recent fall in the share price (It's fallen $0.25 since I've been watching
it!).  My question is:

Does anyone know if there is reason behind the recent fall?  Is there some
announcement/article that has escaped my research?

The cynic in me said that it due to insiders selling out prior to a
(possibly) disappointing annual report.

My current strategy is to buy in as soon as the price closes above the
previous day's close (That's my feeble attempt at technically timing my
For those who are interested, the fundamental justification for purchasing
WHS is as follows:

The current ratio (i.e. for every $1 of current liability we have $x of
current assets) has been increasing, from 1.63 in Aug '00 to 2.484 in Jan

Gearing ratio (a measure of how much long term debt the company has) has
been decreasing, from 0.41 in Aug '00 to 0.365 in '03.

The only area of concern is (apart from the one detailed above) is the
return on assets percentage (how much revenue the company generates from
each $1 of asset) - which has fallen from 14.5% in '01 to 13.5% in '02.

Opinions would be appreciated...


"Cheap crap is still crap"

> Hi Gooner and T100
> >>
> >> Firstly I want to say how much I appreciate your analysis on
> >> sharechat.
> >>
> >> I am interested to know how you arrive at some of the numbers in
> >> your latest post.
> >>
> >
> > I was going to ask the same question.  If Snoopy is saying he can
> > guarantee 14% from this stock during the next 10 yrs then I want to
> > know where he got his crystal ball from so I can shop there!
> >
> Fair questions I think, and I admit the detailing in my last post may
> have been a little obscure.
> You can both buy the same crystal ball as I have, for $29.95 ($29.95
> from techbooks, AKL) according to Tony.  This IIRC is at least $10 less
> than I payed for the same 'crystal ball' two years ago - darn!    Blame it
> on the exchange rate movements in the meantime.
> However, before you consider this the bargain of the century this
> crystal ball does come with a few riders.    It will take you a week to
> read the instructions, another week to fully understand them and
> probably another week to implement them.   You will need patience.
> Many new crystal ball owners simply give up at this point.    You will
> need the resolve to not be one of them.
> Secondly, this crystal ball will tell you what is likely to happen but it
> not tell you when.    This crystal ball will tell you if you are looking
at an
> intrinsically good business.  It will show you that the quality of this
> business has been proved by their deeds and not just words.   It will
> tell you if management continue on their proven path where the
> company will be in ten years or so.   There may be a wicked witch or
> two to overcome on the path.  Unfortunately this crystal ball cannot tell
> you about those!   These witches will manifest themselves in a way
> that you do not expect and cannot prepare for:  Perhaps Apes fighting
> in Iraq?   Perhaps SARS?   But you will set off on your business
> journey via crystal ball knowing that you have a management team with
> the knowledge and track record to deal to *most* of those wicked
> witches.
> Nevertheless there is always a chance you will be mortally wounded
> on such an investment journey.  Based on my own experiences  this
> chance is around one in five.   For this reason you should never only
> walk one path.  A bare minimum of five at a time is in order and I would
> recommend at least twice as many as that!
> Now on the subject of the specific investment path about which you
> asked....
> The 14% return I quoted is based on the Warehouse being able to
> reinvest their returned earnings and grow the business base, as they
> have done for ten years.  It is the skill and market position of WHS that
> enables this  crystal ball to see so far ahead for WHS.   For 95% of
> companies this crystal ball will not work at all!
> Oh. and there will be a trickle of dividends to keep you going along the
> way as well.  I've counted that too.
> For the numerical answer, you must look to the focus investment group
> and the recent long thread on the Warehouse.    The number of 14%
> falls out of the compounding rate of return formula that 'Winner69' and
> I have worked on over the last year or so.  Good luck on *your*
> journey.
> --
> Message sent by Snoopy
> on Pegasus Mail version 4.02
> ----------------------------------
> "Sometimes to see the wood from the trees,
> you have to cut down all the trees."
> --------------------------------------------------------------------------
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