Will This Large-Cap Stock Retain Its Decent YTD Return – ASX: HVN?

  • Apr 14, 2019 AEST
  • Team Kalkine
Will This Large-Cap Stock Retain Its Decent YTD Return – ASX: HVN?

Harvey Norman Holdings Limited (ASX: HVN) is an ASX listed retail company which is engaged in the business of selling consumer electricals, computer, furniture, communication products etc. Other interests of the company are in property and digital enterprise. The company also grants franchise licences across the regions including, New Zealand. Australia, Europe etc. The company has three brands under its roof namely; Domayne, Harvey Norman and Joyce Mayne.

The stock has given a decent YTD return of 22.78%. Evidently, there has been a lot of developments in the company, performance increase and change in shareholding pattern seen in recent months.

On 28th February 2019, the company announced its results for 1HFY19, and the company reported decent numbers. The company reported a net profit after tax (NPAT) and non-controlling interest of $222.77 million which increased by 7.3% from the previous corresponding period (PCP). It also reported some of the highlights for the company including landmark $3 billion net asset milestone surpassed in HY19. It posted strongest-ever performance from overseas company-operated stores with offshore revenue crossing $1 billion. The 89 Harvey Norman overseas company-operated stores contributed to 25% of the total consolidated profit before tax (PBT). On the PBT side, the company has been able to post four consecutive record-breaking figures, the latest being $297.04 million. The overall fundamentals of the business are becoming strong which is reflected in the earnings leading to an increase in the EPS to 19.55 cents per share from 18.38 cents per share.

The company’s strategy is quite robust which combined with its unique business model lays the foundation for further success. It has now a retail footprint in 8 countries, taking the company’s global play to higher levels. Talking about the company’s robust property portfolio, it has surged to the value of $2.93 billion which states the competitive advantage against both the emerging and restructured competitors.

This all has been made possible by the driver of the company, the management. It is led by a highly qualified team in Australia and offshore who have in-depth knowledge about the key drivers of the discretionary retail market. The company is committed to investing in its employees and leaders effectively position the brand in each of the differing markets.

Looking at the speed at which the business is growing, with the qualitative management and the prospects lying ahead, the YTD return may improve from here in months to go. This will also be impacted majorly by the company’s 2HFY19 result. Market risk should also be taken into consideration while making any investment decision.

The market capitalisation of the stock is A$4.58 billion with 52-week high of A$4.14. Currently, the stock is trading close to 52-week high at A$3.96 and has given a return of 2.1%, 19.7% and 13.1% in the last one month, three months and six months as of 12th April 2019.


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