latest II recommendation on MRLRecommendation: Sell down to...

latest II recommendation on MRL

Recommendation: Sell down to $1.15
We've made a mistake and, we are sorry to say, it's a large one. It has been an arduous process but we have become increasingly uncomfortable with Miller's Retail and its management since the release of the company's inadequate annual report. Attending the annual meeting last week, we hoped the concerns we raised with management might be addressed. But not even the view from the meeting room on Level 10 of Darling Park Tower could allay our disappointment. We already knew the discount variety division was doing it tough. What we wanted to know was how management intends to deal with the problem, and on that point we were given precious little. Instead, shareholders were fed gobbledegook slogans such as 'creating the platform' for growth, 'brand repositioning' and 'supply chain management'. Such phrases are not what we expect of a management team in partnership with shareholders. We'd be less concerned if we could see any respite, but details about current performance were also lacking. Like-for-like sales for the first four months of this financial year were down 2%, with no breakup between apparel and discount variety provided. Our conclusion is that the business's performance may be worse than we thought for longer than we thought, and that management is hoping that the current television advertising campaign and Christmas trading might save its bacon. This doesn't inspire confidence, which partly explains why the stock has fallen 10% since last issue (Hold - $1.29). While there's no need to panic, we can no longer justify portfolio holdings of 10% in a troubled company when management has clammed up. We recommend subscribers now SELL enough shares in Miller's so that it represents no more than 5% of your portfolio, down to a price limit of $1.15. Clearly, we have misjudged Miller's badly, and we'll be analysing why next issue.


Someone suggested that when II downgraded to sell, they would buy as II Sells have headed north.

So Buy when II has sell and sell when II has buy.

Makes sence.