Financial Trading Blog
Stock of the day 10/12/2015 – SuperGroup PLC
Can the company’s surge continue with its 2016 interim results next Wednesday?
After starting 2015 at £8.89 SuperGroup had risen to £12.44 by the eve of its full year results at the start of July, that 6 month period containing a 12% jump in Christmas sales, the announcement that Idris Elba would be the new face of the brand and a 11% rise in half year sales, all helping take the stock to its highest price since 2014’s Easter profit warning.
(Source: IT-Finance.com 10/12/2015)
Things got even better with the company’s actually full year results, SuperGroup jumping 7% after beating analysts’ expectations with a 2% rise in adjusted pre-tax profit to £63.2 million alongside a 13% increase in sales to £486.6 million. Even more important, however, was the company’s announcement of a 10-year, 50-50 tie-up with China’s Trendy International Group, the initial cost of £18 million paid by SuperGroup giving way to the venture being self-funded within 2 years.
Following these full year figures SuperGroup kept climbing, culminating in a 16 month peak of £15.97 by the middle of August. However, this high was quickly lost due to China-inspired chaos of the subsequent period, something that likely stung SuperGroup more than normal due to its recent expansion into the country, with the stock eventually falling to £12.96 towards the end of September.
Yet SuperGroup saw a swift recovery as October got underway, and by the time of its half year update at the start of November the stock was trading back at the £15 level. That update caused another super-surge, SuperGroup jumping 12% as it revealed a 22% increase in group sales to £255 million, leaving the stock at a 19 month high of £16.90 (and just over a pound away from the all-time peak hit in February 2011). Since then SuperGroup has traded relatively laterally, sitting at a current price of £16.11 (IT-Finance.com, 10/12/2015).
SuperGroup has a consensus rating of ‘Buy’ with an average target price of £16.01.
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