Anyone fancy Halfords shares?

ajbell

Halfords shares are paying about 9.5% dividend, anyone think they are worth a punt?.

sabretoothtigger

They used to serve only bikes. The take Ive heard is they will prosper as people are forced towards cheaper maintenance with their own labour

I guess they are unpopular as part of retail. Do they have any problem with debt or leases, etc

Radiantsoul

£140m of debt, poor ytd trading and no short-term growth.

Glen_Clark

High prices in the stores. So more cash strapped customers will probably desert them

sabretoothtigger

and go where though. Is the market sector expanding or contracting. I agree they could see more business but whether are able to handle that is Im not sure

http://www.telegraph.co.uk/finance/markets/questor/3125191/Its-worth-keeping-Halfords-in-your-saddle-bag.html

High yield you should always assume is a red flag. This is very high, the share is being actively avoided. Whats the cover on the payout, will it exist next year
I own a share with 15% yield, I think they good for it but most do not. Recently they requested people take shares instead of money. High debt requires high growth to justify it or the profits just go to pay bond interest

Glen_Clark

sabretoothtigger wrote: »

and go where though.

Cheapest places are motor factors on industrial estates. But in the town where I live everywhere is cheaper than Halfords. A pack of car bulbs in the Pound shop would be a tenner in Halfords.

Masomnia

I seem to remember HMV paying a similar yield before the price tanked something in the order of 90% shortly after. Clearly the market doesn't think it's sustainable. I'd avoid.

atush

All I know is, I an getting a new roof box this year. Last one I bought form them over 10 yrs ago is too small and cracked.

I don't know where else to buy roof boxes? I would use them more often, but no outlet wher i live.

gadgetmind

ajbell wrote: »

Halfords shares are paying about 9.5% dividend, anyone think they are worth a punt?.

Dividends over 5-6% are a warning sign. Dividends close to double digits are doubly so.

As a small part of a balanced portfolio, maybe, but not as a major punt, no way,

I hold two shares with divis at these levels(1), Aviva, and Schroder Real Estate. I know that both could turn brown and sticky, but both are sub 1% of my overall portfolio.

And they still scare me.

(1) - I also hold LLPC, NWBD and a few other high-yield, bowel-loosening prefs. Do as I say, don't do as I do.

C_Mababejive

no.their stores are carp

sabretoothtigger

Masomnia wrote: »

I seem to remember HMV paying a similar yield before the price tanked something in the order of 90% shortly after. Clearly the market doesn't think it's sustainable. I'd avoid.

HMV is competing against the internet, basically against the whole world and people like Amazon can wade here with no problem on that front.
It was obviously a bad business model to be investing in with any optimism. Look at that first, the yield thing was secondary.
Is the utility of the product or the sector even improving or declining in its use. Are its customers increasing in number and also in their wealth even, in general UK is going to be dire for a decade tbh

I dont like retail in general, we are talking about margin compression not expansion. Great if you are buying but sellers I see as under pressure unless you pretty darn smart.

The only thing I ever took was Tesco because I thought they had the innovation to expand laterally and are not backwards on things like online sales.
However the share has not done great, if they struggle pretty much everyone will