The Motley Fool

Myer share price on watch after court judgement

The Myer Holdings Limited (ASX: MYR) share price is on watch after the Federal Court found it misled shareholders in 2015.

What did Myer announce yesterday?

Myer provided an after-market update as the Federal Court handed down a judgement regarding its 2015 conduct.

A class action was brought against the company and its then-CEO Bernie Brookes regarding its profit guidance.

The Court found that Mr Brookes’ 11 September 2015 comment that Myer “anticipated profit growth” in FY15 was unfounded.

The Myer share price slipped lower as it subsequently downgraded net profit after tax (NPAT) guidance on 19 March 2015.

The Court found that Myer engaged in “misleading or deceptive conduct” from 21 November 2014 to 19 March 2015.

The Court also found that there was “no evidence” that the misleading profit guidance caused any loss or damage.

What does this mean for the Myer share price?

Myer entered a trading halt early yesterday afternoon ahead of the judgement and subsequent announcement.

The Myer share price was trading at $0.57 per share prior to the halt as it continues to slide lower.

While Myer shares are cheap at the moment they are still trading at 19.6x earnings, given earnings are also declining.

The Federal Court found that no damage was caused because no one acted on the misleading guidance numbers.

Foolish takeaway

The market reaction to the Federal Court judgement will be one to watch in early trade.

The Myer share price has been one of the hardest-hit in the ASX Retail sector in recent years. Retail trading conditions continue to deteriorate and those bricks-and-mortar operators like Myer are struggling.

It’s been a similar story for rival David Jones as Aussie retail battles the move towards an online-only model.

I would prefer to look at the Consumer Staples sector rather than Consumer Discretionary at the moment. That could mean that Coles Group Limited (ASX: COL) or Woolworths Ltd (ASX: WOW) are in the buy zone in 2020.

If you're looking for some more dividend growth in 2020, check out these 3 high-yield stocks below!

Top 3 Dividend Shares To Buy For 2020

When Edward Vesely -- our resident dividend expert -- has a stock tip, it can pay to listen. With huge winners like Dicker Data (up 147%) and Collins Food (up 105%) under his belt, Edward is building an enviable following amongst investors that are planning for retirement.

In a brand new report, Edward has just revealed what he believes are the 3 best dividend stocks for income-hungry investors to buy now. All 3 stocks are paying growing fully franked dividends giving you the opportunity to combine capital appreciation with attractive dividend yields.

Best of all, Edward’s “Top 3 Dividend Shares To Buy For 2020” report is totally free to all Motley Fool readers.

Click here now to access this free report.

Motley Fool contributor Kenneth Hall 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.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.