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Is now the right time to offload your JB Hi-Fi shares?

jb hi-fi

Key statistics: ASX: JBH
Closing share price 05.06.18: $23.550
52-week high: $29.470
52-week low: $21.200
Most recent dividend: 86c
Annual dividend yield: 5.63%
Franking: 100%

We have maintained for some time that the JB Hi-Fi acquisition of The Good Guys was poorly timed at best and misguided at worst.

When it downgraded earnings guidance in May, it suggested that unfavourable weather had hit sales of air conditioners and heaters at The Good Guys.

But it also revealed that price cuts to maintain market share had crimped margins.

The forces on margins are unlikely to relent any time soon and a company generating an operating profit of $235 million on sales of almost $7 billion is not one to write home about.

SELL

Written by Roger Montgomery

Roger Montgomery

Roger Montgomery is the chairman and CIO of Montgomery Investment Management.

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