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Should you sell JB Hi-Fi Limited before its too late?

Credit: Peter Heath

Shares in speciality home-entertainment retailer JB Hi-Fi Limited (ASX: JBH) are down 0.5% today to $26.20 at the time of writing after a slide down from a January 2018 high of $29.03.

JB Hi-Fi is among retailers in the discretionary spending space suffering a bit at present, with Super Retail Group Ltd’s (ASX: SUL) 12-month share price chart showing a definitive decline in price from $9.92 at this time last year to $6.94 at the time of writing – a drop of more than 30%.

Sector stalwart Harvey Norman Holdings Limited (ASX: HVN) is down 1.7% today to $3.46 at the time of writing after bottoming out considerably over the last 2 months from a share price high of $4.58 in February.

JB Hi-Fi has defied odds by producing strong profit results in recent years, with its report for the half-year ending December 31, 2017 showing net profit growth of 21% total sales growth of 41% and EPS up 13.7%.

But stiff competition from the likes of Amazon is likely to hit JB Hi-Fi hard in the coming months and investors might want to think about locking in some profit soon, as company margins are expected to take a hit as Amazon ramps up operations.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Super Retail Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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