Brown N reported today figures that so far pleases the market. The company was first mentioned here in this post around June time last year, as talk at the time was of a potential takeover target for ASDA. Nothing came of that and the company is far more expensive today for any potential bidder than it was back then. It is up today around 4-5% so far on the back of its statement, so there is a lot of good news already in the price. The weekly chart clearly has momentum though and looks like it wants to go higher.
The arrow on the weekly chart below shows when it was first mentioned here, the breakout to the upside was just about to start. I think what the chart also shows is how once you get away from the noise of the shorter time frames on charts, the longer time frame periods look far smoother and like an ocean liner once under way any reverse takes a while to happen. The same tends to be true of these longer term trend moves. I would not want to bet against the company going higher from here until something changes on this longer time frame to justify it.
Chart:
Showing posts with label Brown (N). Show all posts
Showing posts with label Brown (N). Show all posts
Wednesday, 24 April 2013
Monday, 22 April 2013
The Week Ahead 2 - 22nd to 26th April 2013
The week ahead.
Data:
22nd April
EU Consumer Confidence Indicator
23rd April
US House Price Index
US New Homes Sales
25th April
UK GDP (Preliminary)
US Bloomberg Consumer Confidence
US Continuing Claims
US Initial Jobless Claims
26th April
US GDP (Advance)
EU M3 Money Supply
US Personal Consumption Expenditures, Income, Spending
US U. of Michigan Confidence
Company Announcements
24th April
Finals - Home Retail Group. Been going well recently but the fundamentals are looking quite generous for a retailer. Will be interesting to see what effect if any the March/April winter weather has had on business. Note - my mistake this result is due next week.
Finals - Brown N Group. I first mentioned Brown in this post, Retailers Under The Cosh as one to watch in the FTSE250, potential takeover target and probably undervalued. Back then it was around 242p, today 420p as of Friday's close. Be interesting to see if it can maintain this momentum once it announces its finals. Didn't give anything away back in March as to what to expect.
25th April
Interim Management statement - Playtech. Has done well lately out of doing business with William Hill and has also recently agreed a deal with Ladbrokes.
Markets and charts
Data:
22nd April
EU Consumer Confidence Indicator
23rd April
US House Price Index
US New Homes Sales
25th April
UK GDP (Preliminary)
US Bloomberg Consumer Confidence
US Continuing Claims
US Initial Jobless Claims
26th April
US GDP (Advance)
EU M3 Money Supply
US Personal Consumption Expenditures, Income, Spending
US U. of Michigan Confidence
Company Announcements
24th April
Finals - Home Retail Group. Been going well recently but the fundamentals are looking quite generous for a retailer. Will be interesting to see what effect if any the March/April winter weather has had on business. Note - my mistake this result is due next week.
Finals - Brown N Group. I first mentioned Brown in this post, Retailers Under The Cosh as one to watch in the FTSE250, potential takeover target and probably undervalued. Back then it was around 242p, today 420p as of Friday's close. Be interesting to see if it can maintain this momentum once it announces its finals. Didn't give anything away back in March as to what to expect.
25th April
Interim Management statement - Playtech. Has done well lately out of doing business with William Hill and has also recently agreed a deal with Ladbrokes.
Markets and charts
Friday, 18 January 2013
ASOS, a short seller's nightmare and potential dream.
ASOS is one of those stock market stories where you wonder how does it manage to maintain stock market gravity with its share price? For those that don't know it is an online fashion retailer listed on AIM. It has just announced its latest Christmas trading which on the surface looks good.
Its last pre-tax profit listed on DigitalLook was £13.24 million, in total for 2012 it was £47.59 million and expected to grow going forward, ASOS is a retailing success story. However, its share price stands at 2714p, P/E over 90 and a market cap of around £2.225 bllion! That's a market cap that would put it in the top 50 of the FTSE250. Well known competitors Debenhams currently has a market cap around £1.300 billion, Brown N Group, just over £1 billion, ASOS is valued at just about the same as both of these put together. And although in a totally different retailing sector, Dixons is valued at £986 million.
Still, despite the valuation it has been a bit of a nightmare for anyone wanting to short it. There is lots of good news and sentiment in the price, but with that valuation it needs to continue to grow and impress, one bad result or perceived poor showing could see this one go south big time. For now however, you need pretty deep pockets to short this one with any confidence and if you are a bull, deep confidence to be sure it can keep going.
A good analysis can be found here;
http://tradingresearchpoint.co.uk/2013/01/18/asos-trading-statement-evil-knievil-and-the-bears-will-carry-on-getting-burned/
British online fashion retailer Asos on Thursday posted a 41 per cent rise in sales over the Christmas period as reduced prices lured shoppers.http://www.digitallook.com/cgi-bin/dlmedia/security.cgi?csi=38216&action=news&story_id=20629286
Asos, aimed at twenty-somethings, said global retail sales in December climbed to £78.1m year-on-year for the month ended December 31st.
Christmas sales were strongest in the group’s overseas market with a 57% increase in the US and 42% elsewhere, while UK sales jumped 34%.
Its last pre-tax profit listed on DigitalLook was £13.24 million, in total for 2012 it was £47.59 million and expected to grow going forward, ASOS is a retailing success story. However, its share price stands at 2714p, P/E over 90 and a market cap of around £2.225 bllion! That's a market cap that would put it in the top 50 of the FTSE250. Well known competitors Debenhams currently has a market cap around £1.300 billion, Brown N Group, just over £1 billion, ASOS is valued at just about the same as both of these put together. And although in a totally different retailing sector, Dixons is valued at £986 million.
Still, despite the valuation it has been a bit of a nightmare for anyone wanting to short it. There is lots of good news and sentiment in the price, but with that valuation it needs to continue to grow and impress, one bad result or perceived poor showing could see this one go south big time. For now however, you need pretty deep pockets to short this one with any confidence and if you are a bull, deep confidence to be sure it can keep going.
A good analysis can be found here;
http://tradingresearchpoint.co.uk/2013/01/18/asos-trading-statement-evil-knievil-and-the-bears-will-carry-on-getting-burned/
Wednesday, 27 June 2012
Retailers under the cosh
No one should be surprised that retailers in the UK are struggling at the moment. We are 4-5 years into "austerity" and other than the financial elite who have benefited from QE, there is little in the way of new money about for Mr and Mrs Average to spend. The market, at least in the way it looks at many retailing stocks seems to expect the type of pre-2007 spending, much of which was on credit anyway, to continue. At least that's the way it looks if you look at some of the analyst expectations for FTSE stocks.
So, against this backdrop it is interesting to see that some retailers have actually done pretty well or at least held up in the face of austerity, while others have struggled and some gone under. The market however, seems to have labeled them all the same, retailing to a large degree is an unloved sector right now almost regardless of performance. Unless you think the world is coming to an end or that we are never likely to see another consumer boom, sooner or later things will turn around and good companies even in the retailing sector will be in demand again. Here's a few that should be around for a long time and do well.
Tesco has already been mentioned elsewhere here, but it really does look like an unloved giant right now. It has mainly struggled to keep pace with others in the UK, but as it had built up a 30% take of the major retailers market, it did seem inevitable that this would be impossible to maintain. The market has punished the company share price with a vengeance since it announced its first profit warning back in January. A profit warning that basically said that profits would come in at the lower end of analyst expectations. Profits for the company as a whole including overseas were actually up for the year, almost £200 million higher than the previous year at an impressive £3,835 billion. Some FTSE350 companies would be happy with a £200 million profit on its own. City analysts still expect Tesco to hit £4 billion in profits in the next two years or so despite all the negativity and falling share price.
On the back of recent falls, Warren Buffet has been a heavy buyer while UK fund manager Neil Woodford has been a seller. Buffet likes to buy market leaders and ride the ups and downs of market sentiment. Woodford saw better opportunities elsewhere. Only time will tell which is right.
Tesco have responded to city criticism by refocusing on its UK operations, but it will take time to turn around, especially when you take into account that the competition in the UK market are also good companies under the cosh.
Sainsbury and WM Morrison have both done well in the last 4 years despite austerity. Both have more or less performed in line or bettered analyst expectations. Sainsbury announced in January its best Christmas trading ever and promptly fell 5-6% a few days later on the back of Tesco's "profit warning".
Sainsbury Pre-tax profits (year ending March)
2008 £479 million
2009 £466 million
2010 £733 million
2011 £827 million
2012 £799 million
Dividend yield for the same 5 year period 3.6%, 4.2%, 4.3%, 4.3% and 5.3%. Dividend cover is currently 1.7, P/E 10.4. Sainsbury has seen its share price more than halve in value over the same period, the market no longer being prepared to pay any premium for mainly food retailers.
W M Morrison Pre-tax profits (year ending Jan)
2008 £612 million
2009 £655 million
2010 £858 million
2011 £874 million
2012 £947 million
Dividend yield for the same period, 1.6%, 2.1%, 2.8%, 3.6% and 3.8%. dividend cover is 2.4 and next year the dividend forecast is over 4.0%, P/E 10.3. Considering that Morrison has no online presence it has done well to increase its market share. Share price has fallen recently not helped by the Finance Director saying that he will be moving on. Still one to watch for future growth.
One to watch in the FTSE 250 is Brown (N) which has performed solidly increasing its profits from £78 million five years ago to £96.9 million in the latest financial year. The dividend yield has also gone up from 3.6% to 5.5%, dividend cover 2.2, P/E 8.3. There was also a report a week or so ago that ASDA might be looking at a takeover at 360p a share, current price 241.6p. This was downplayed, but if market talk of 360p a share is to be believed then the company is seriously undervalued at current levels. While the bigger retailers tend to carry quite a lot of debt, they also have significant assets. Brown on the other hand has very little debt and might be attractive to a bidder in the future.
http://www.telegraph.co.uk/finance/markets/marketreport/9339973/Asda-looked-at-1bn-N-Brown-takeover-deal.html
Data from DigitalLook
So, against this backdrop it is interesting to see that some retailers have actually done pretty well or at least held up in the face of austerity, while others have struggled and some gone under. The market however, seems to have labeled them all the same, retailing to a large degree is an unloved sector right now almost regardless of performance. Unless you think the world is coming to an end or that we are never likely to see another consumer boom, sooner or later things will turn around and good companies even in the retailing sector will be in demand again. Here's a few that should be around for a long time and do well.
Tesco has already been mentioned elsewhere here, but it really does look like an unloved giant right now. It has mainly struggled to keep pace with others in the UK, but as it had built up a 30% take of the major retailers market, it did seem inevitable that this would be impossible to maintain. The market has punished the company share price with a vengeance since it announced its first profit warning back in January. A profit warning that basically said that profits would come in at the lower end of analyst expectations. Profits for the company as a whole including overseas were actually up for the year, almost £200 million higher than the previous year at an impressive £3,835 billion. Some FTSE350 companies would be happy with a £200 million profit on its own. City analysts still expect Tesco to hit £4 billion in profits in the next two years or so despite all the negativity and falling share price.
On the back of recent falls, Warren Buffet has been a heavy buyer while UK fund manager Neil Woodford has been a seller. Buffet likes to buy market leaders and ride the ups and downs of market sentiment. Woodford saw better opportunities elsewhere. Only time will tell which is right.
Tesco have responded to city criticism by refocusing on its UK operations, but it will take time to turn around, especially when you take into account that the competition in the UK market are also good companies under the cosh.
Sainsbury and WM Morrison have both done well in the last 4 years despite austerity. Both have more or less performed in line or bettered analyst expectations. Sainsbury announced in January its best Christmas trading ever and promptly fell 5-6% a few days later on the back of Tesco's "profit warning".
Sainsbury Pre-tax profits (year ending March)
2008 £479 million
2009 £466 million
2010 £733 million
2011 £827 million
2012 £799 million
Dividend yield for the same 5 year period 3.6%, 4.2%, 4.3%, 4.3% and 5.3%. Dividend cover is currently 1.7, P/E 10.4. Sainsbury has seen its share price more than halve in value over the same period, the market no longer being prepared to pay any premium for mainly food retailers.
W M Morrison Pre-tax profits (year ending Jan)
2008 £612 million
2009 £655 million
2010 £858 million
2011 £874 million
2012 £947 million
Dividend yield for the same period, 1.6%, 2.1%, 2.8%, 3.6% and 3.8%. dividend cover is 2.4 and next year the dividend forecast is over 4.0%, P/E 10.3. Considering that Morrison has no online presence it has done well to increase its market share. Share price has fallen recently not helped by the Finance Director saying that he will be moving on. Still one to watch for future growth.
One to watch in the FTSE 250 is Brown (N) which has performed solidly increasing its profits from £78 million five years ago to £96.9 million in the latest financial year. The dividend yield has also gone up from 3.6% to 5.5%, dividend cover 2.2, P/E 8.3. There was also a report a week or so ago that ASDA might be looking at a takeover at 360p a share, current price 241.6p. This was downplayed, but if market talk of 360p a share is to be believed then the company is seriously undervalued at current levels. While the bigger retailers tend to carry quite a lot of debt, they also have significant assets. Brown on the other hand has very little debt and might be attractive to a bidder in the future.
http://www.telegraph.co.uk/finance/markets/marketreport/9339973/Asda-looked-at-1bn-N-Brown-takeover-deal.html
Data from DigitalLook
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