As a business owner, nothing would give more satisfaction than proving the doubters wrong.
One much-criticised consumer discretionary giant is doing exactly that, piquing the interest of professional investors such as Shaw and Partners portfolio manager James Gerrish.
And what's more, the retail stock is paying out a fully franked dividend yield in excess of 6%.
Let's take a look at Gerrish's buy recommendation:
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'Continue to outperform expectations'
Harvey Norman Holdings Limited (ASX: HVN) is derided by some experts as an underperformer that's too beholden to founder and largest shareholder Gerry Harvey.
And those critics might have a point, with the dividend stock only gaining 20.5% over the past five years.
However, the share price has rocketed more than 6.7% since last Thursday's annual report.
Gerrish understood the market's enthusiasm.
"The retailer delivered FY23 net profit of $539.5 million, which, while down 34% year-on-year, was well ahead of consensus at $461.5 million," he told a Market Matters newsletter.
"Some analysts also commented that the company's franchise segment exceeded expectations."
Due to its long-held stigma, Harvey Norman shares have much short interest betting against them.
But that could work in the favour of investors who buy now.
"With 6.2% of the stock held short we could see a short squeeze unfold after it's almost halved from its 2021 high," said Gerrish.
"Consumer-facing stocks continue to outperform expectations."
With the Harvey Norman stock price now hovering around the $4 mark, Gerrish's team is definitely bullish.
"We believe the next ~10% for Harvey Norman is on the upside, which is attractive when combined with an estimated 6.4% fully franked dividend over the next 12 months."
Analysts at Citi felt the same about the dividend stock, last week upgrading its rating to buy.
"Citi feels it is unlikely to get worse from here for Harvey Norman," reported The Motley Fool's James Mickleboro.
"Particularly given that there are numerous tailwinds on the horizon including a house price recovery, a warmer summer allowing the sell-through of excess seasonal inventory, and the stage three tax cuts."
