Harvey Norman Share Price Bouncing Strongly (ASX:HVN)
Today we look at what’s happening with the Harvey Norman Holdings Ltd [ASX:HVN] share price.
The Australian retailer made the bold decision to keep its stores open throughout the coronavirus pandemic.
Having to adhere to strict social distancing practices and enhanced hygiene measures, it appears Harvey Norman was able to pull off a bit of a master stroke.
Sitting at $3.64 at the time of writing, Harvey Norman’s share price has rebounded 56.63% from the low in March.
A bit of background on Harvey Norman’s recent moves…
Harvey Norman operates stores both here in Australia and internationally. With nearly all international stores having to close due to government restrictions, it was only the Australian stores that could stay open.
With stores remaining open in Australia and a lot of people shopping from home while in lockdown, sales were up 17.5% in the June half.
In April, the company cancelled the payment of dividends to preserve $150 million in cash to protect themselves from the uncertainty of the pandemic and combined with the sales growth, Harvey Norman has now found itself in a stronger position.
Subsequently, the company was able to announce on 29 June that they will be paying a special dividend of six cents per share.
Potentially contributing to this result is the stability provided by the group’s real estate holdings.
Currently Harvey Norman holds a property portfolio valued at $2.99 billion (as at 30 June 2019), representing over 62% of the consolidated entity’s total asset base.
This provides the company with a bit more wiggle room to absorb shocks.
You can contrast HVN’s fortunes for instance with Myer Holdings Ltd [ASX:MYR], which now has a paltry market cap of $193 million.
Where to from here for HVN share price…
From the onset of the coronavirus in February until late March 2020, Harvey Norman’s stock price fell just over 52% to $2.33. The HVN share price is building momentum on the weekly:
The HVN share price is currently hovering around the historical resistance level of $3.66, if it breaks up through this, levels of $3.93 and $4.34 may come into focus.
On the downside, if the price starts to pull back, levels of $3.19 and $2.95 may provide support in the future.
For Money Morning
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