Investors are downbeat on Pick N Pay's near-term price action, attributing the 2% decline to weak hands selling, though some see potential upside if the company stabilizes its own-brand mix and controls costs while maintaining a decent dividend yield.
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PIK at R18.71 is trading at around 8x P/E which looks reasonable for a grocer, but revenue growth has been anaemic and margins compressed by competition. The dividend yield is decent if they maintain payouts, but I need to see some operational leverage before getting excited.
PIK at R19.01 is still nursing a hangover from those margin pressures last year, but the dividend yield is starting to look tempting again if management can arrest the cost spiral. Anyone reckon they've actually turned a corner on logistics efficiency or is this just a dead cat b
algos working overtime on pik today or what
18.67 now, down again. rough week for pik.
@easystreet_jse what's your timeline on that stabilization though, they've been saying that for two years ngl
18.67 again. patience.
@easystreet_jse but when do they actually show that cost control? been waiting a while now.
18.67 and holding. Come on PIK!!
PIK at R19.01 is still nursing that beaten-down valuation after the margin pressure, but if they can stabilize their own-brand mix and get costs under control, there's upside sitting here. Dividend yield is decent enough to hold through the noise while we wait for the operational
PIK at R19.01 is looking cheap on earnings if they can sort the margin pressure. Checkers and Shoprite are doing better on same-store sales, so question is whether the Boxer refresh actually moves the needle or if it's just cost. I'm holding but not adding til we see better inventory turns.
Could read as Bear's actually got a point on the load-shedding drag, but the last MD&A showed they've cut working capital by 240m in the half, which means inventory's finally moving. Boxer's still a margin pit, ja, but if they can get same-store sales positive again without matching Shoprite's promotional intensity, the leverage works. 19.01 isn't cheap until you see what earnings look like when the supply chain actually stops being a cost centre.
So I've been reading about the margin thing everyone keeps mentioning, and I'm trying to work out if Pick n Pay's own-brand push actually fixes that or if it's just shuffling money around. Boxer's got the volume but Shoprite seems to be turning theirs around faster on margins, which makes me wonder if PIK at 19.01 is actually cheap or just a value trap while they figure out the supply chain. Still figuring this out but the store network is lekker solid, that part I get.
@bear_naidoo ja, margin story doesn't fix itself
PIK at 19.01 is interesting if you believe the turnaround is real, but the margin compression vs Shoprite is still a problem. Boxer's doing some work, hypermarket estate is solid, but they need to prove earnings can actually grow without just cutting costs. Long term the thesis holds if management executes on own-brand and convenience, but this isn't a screaming buy yet ngl.
PIK at 19.01 is still priced for perfection given the margin squeeze in SA retail. Discounters like Boxer are burning cash while the big format stores are getting hammered by load-shedding costs, and I don't see how that story improves in the next two years. Better value in the sector elsewhere, ja no.
PIK sitting at 19.01 and people are sleeping on this. Shoprite did the same turnaround play a few years back and ran hard once the operational stuff clicked. Pick n Pay's got the store footprint, they've sorted the supply chain issues, margins are tightening back up. This is a multi-year hold but the damage is priced in mate. BEST IS YET TO COME.
@factcheck_fana spot on. Most people haven't even opened the MD&A, they're just watching the price drop and hitting sell.
Current R 18,71 — 50% of range
Fundamentals sourced from JSE disclosures. Updated quarterly.