JB were inclusive of RCG Corporation Ltd, Oroton
JB Hi-Fi Limited’s
shareholders have faced a rough year so far because the share price of the
company has lost close to 22% in 2017 and the shares fetched less than $
22.This is lower as compared to the high share prices of $ 31.21 in 52 weeks.
Some of the factors that led to the decline in the value of shares may be
inclusive of Amazon.com. The E-commerce in behemoth did not even reach the
shores of Australia, but the investors were worried about the impact that it
would bring about once it expanded down under (Greenhalgh,2017). There was
considerable anticipation that Amazon would bring a significant effect on the
retail industry in Australia, where customer electronics were thought to be
The share price of Harvey Norman Holdings
limited also fell close to 30% in 2017.Another factor that led to the fall in
the value of shares in JB is weak spending. One of the most significant
contributors towards weak consumer spending is the low growth of wages.
Increased interest rates from banks also contribute to weak consumer spending.
Through looking at the global events that occurred in 2017 many of the
investors bought little shares from the company. Another factor that
contributed to the decline in share price in the business is downgrades. Many
of similar retailers downgraded their guidance in 2017.In other words, the
trading updates that they issued in 2017 were very poor. Such retailers were
inclusive of RCG Corporation Ltd, Oroton Group Limited, Myer Holdings Ltd and
Reject Shop Ltd. Due to such downgrades, many of the investors interpreted this
as a signal of an ailing industry (Newman, 2017).
Harvey Norman Holdings Limited is a retail
business which is franchised and also possesses some property development
interests. Some of its stores operate predominantly under a system of
franchising throughout Australia. In the overseas markets, the stores are
wholly owned. Such markets are inclusive of Malaysia and Singapore stores owned
by Harvey Norman. The Rick Hart and
Clive Peters brands are also operated and owned by Harvey Norman (Russell,
2015). The latest ownership structure is an essential factor to consider in
Harvey Norman Holdings Limited because it is a factor that affects the share
price of a company. Harvey Norman has institutional ownership of 17.28%, and in
that case, the company has been able to face some volatile movements in the
share price when block trades are executed by the institution in the open
market. This is mainly when the amounts of shares that are available are
minimal. Such moves have been causing large swings in the share prices. Another
crucial group in the Harvey Norman Holdings Ltd is the company insiders. Since
this team is mainly concerned with the management of the company its impact on
the magnitude of the trading shares in the market is minimal.
One of the most prominent owners in this
company is the individual insiders who have a 37.15% stake. It has been
extensively asserted that ownership of this kind negatively affects the
companies that possess a low PE ratio. The public holds a stake of 27.34% in
the Harvey Norman Company. Such a size of ownership motivates the retail
investors since they have the collective power in making decisions on some of
the significant policy decisions for instance decisions on the director’s
appointments, executive compensation as well as acquisitions of businesses.
Such ownership levels equip the retail investors with the power to make some of
the initial policy decisions (Rowe, 2017). It, therefore, serves as a positive
sign for the investors who want to involve themselves in crucial decision
making in the company.