Although Australian shares are generally trading lower today, JB Hi-Fi Limited (ASX: JBH) has extended its strong rally, rising another 1.9% during today's session. Indeed, the stock has now risen in eight of the last nine sessions, giving it a total gain of 13.3% since 6 May, 2015.
JB Hi-Fi is a specialty discount retailer of consumer electronics and electrical goods, while it also specialises in software, music, movies and, more recently, home appliances. Indeed, the company has performed strongly despite the headwinds facing the retail industry, largely thanks to its low cost business operations and ability to keep prices low.
While the stock has managed to gain nearly 50% over the last six months, its latest gains have largely come as a result of the recent "have a go" Federal Budget.
Companies like JB Hi-Fi, Harvey Norman Holdings Limited (ASX: HVN) and Dick Smith Holdings Ltd (ASX: DSH) are all expected to benefit from the budget with the government extending significant tax benefits to small businesses.
To begin with, small businesses with less than $2 million in annual turnover will see their tax rates cut to 28.5% from 30%, while any business-related item purchased for less than $20,000 will become an immediate tax write-off (thus reducing their tax liabilities). Items such as work laptops, tablets and phones are expected to be in hot demand, especially considering these items are also now exempt from fringe benefits tax as well.
In a sign that Hockey's second budget is already making a difference, the ANZ-Roy Morgan consumer confidence gauge jumped 3.6% over the last week, suggesting that consumers could soon start spending more. That comes as fantastic news for JB Hi-Fi, together with Harvey Norman and Dick Smith.
