How the rich invest: Gerry Harvey

Gerry Harvey says he’ll sell his investment portfolio to buy more Harvey Norman shares. But he risks missing out if he does.

Gerry Harvey in an expansive mood at the Magic Millions racing carnival. Picture: AAP

Billionaire Gerry Harvey has said he will “put his money where his mouth is” and sell his investment portfolio to buy more shares in his under-pressure retail giant Harvey Norman.

* Name:Gerry Harvey

* Age:78

* Lives:Sydney

* Estimated wealth:$2.12 billion

* Source:Harvey Norman shares

* Secrets of Success:Built a retail giant and diversified into other shares, plus horse racing interests

But an analysis of his shareholdings shows some of Harvey’s shares are going quite well, meaning he faces a choice of selling and taking some profits off the table or staying in for some more growth.

Either way, Harvey seems determined to silence the naysayers in Harvey Norman over corporate governance issues at Harvey Norman that include investments in a dairy business, criticism of its remuneration policy and the company’s financial accounts.

He has said he will buy about $10 million worth of Harvey Norman shares, with documents lodged with the ASX already showing he has shelled out $8.03 million to buy 2.3 million shares at an average of $3.49.

“I don’t want to buy more shares I have enough already, but at these prices I would be crazy not to,’’ Harvey told The Australian last week, while also declaring he would sell every other stock he owned in any other company, be it local or overseas and that Harvey Norman should be a “$5 or $6 share”.

Harvey has an eclectic mix of stocks in his portfolio, showing up in among the top 20 shareholders of retail, mining, technology and financial services companies.

Some of them have outperformed Harvey Norman this year, which has fallen about 16 per cent since January 1, including New Zealand retailer Briscoe. It is up about 4 per cent and Harvey has a stake worth about $19 million.

His best though has been Gazal Corporation (GZL), which sells men’s clothing brands such as Van Heusen and Calvin Klein. Gazal shares have doubled in value since the beginning of the year, making it the clear winner in the Harvey portfolio.

A trading update by Gazal in mid-August said its strong performance was mainly due to good sales of the Calvin Klein and Tommy Hilfiger brands in Australia.

Harvey also has shares in Countplus (CUP), a professional services aggregator that until last year counted another rich-lister in Barry Lambert as executive chairman. Countplus shares are up 8 per cent since January 1, but are still worth about two-thirds less than their record high of four years ago.

Emeco Holdings (EHL), a provider of equipment and services to mining companies that has another rich lister in Dale Elphinstone on its share register, is another strong stock for Harvey. Its shares have increased about 39 per cent this year.

Gerry Harvey and Katie Page arriving for the Harvey Norman AGM. Pic: Dylan Robinson

But there are plenty of others in Harvey’s portfolio that he could consider worth selling given how they have slipped throughout 2018.

Shares in IT consulting firm DWS have fallen 20 per cent since January 1 and stock in Eclipx Group, a vehicle lease management firm, are down 35 per cent in the same period. Shares in Eclipx are recovering from a steep fall in August after it rejected a takeover proposal from SG Fleet.

Harvey’s shares in Lithium Power International, which is developing a lithium mine in Chile, are down 47 per cent and he also has stock in toy retailer Funtastic, which is suspended from trading as it renegotiates its debts.