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Why the JB Hi-Fi share price hit an all-time high today

The JB Hi-Fi Limited (ASX: JBH) share price has hit a new all-time high today, just before market close to be precise. JBH shares opened this morning at $32.97 but breezed past this level to hit the new high of $33.81, before inching back to the closing price of $33.73.

This caps off a stunning year for the consumer goods retailer. JB Hi-Fi shares started 2019 at $21.60, so on today’s pricing investors who bought in on a New Year’s Day whim would be sitting on a YTD gain of 56%.

Why have JB Hi-Fi shares been blowing their lid?

In my opinion, it comes down to this ‘Aussie battler’ defying expectations. JB Hi-Fi is exactly the kind of business that everyone was predicting would be steamrolled by Amazon a few years ago. As a retailer, who for one has ‘hi-fi’ in its very name, and used to make its crust primarily through records, CDs, DVDs, and games… well, commentators were very quick to write it off.

However, unlike many companies before it, JB Hi-Fi saw the writing on the wall years ago and has been steadily broadening its range of products to include white goods, computers, kitchen appliances and mobile phones (all more Amazon-resistant) while keeping its core product range intact (a revival in vinyl record interest has also helped).

JB Hi-Fi’s 2019 earnings report again confirmed that the doomsayers have been pretty much wrong on the company. JB Hi-Fi reported a 6.4% lift in earnings, a 7.1% rise in after-tax profits and bumped up its dividend by 11% for the year, vastly exceeding expectations.

This result not only got investors’ attention but also spooked the many investors who had short-sold JB Hi-Fi shares. As my Foolish colleague James Mickleboro reported earlier today, JB Hi-Fi remains one of the top ten most shorted ASX stocks on the market. Strong results like those we saw can cause a ‘short-squeeze’ as short-sellers close their positions, further propelling the share price higher. In my opinion, it’s the combination of these two factors that has lead the JB Hi-Fi share price to its new all-time high today.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.