RE: Article on motley fool - still a good investment in bigger picture21 Oct 2020 13:29
Why I’m still positive on the Boohoo share price
I’ve bought and sold Boohoo stock already this year, and know of others who have bought one of the dips and made very good returns in only a short space of time. I’ll be buying back in to the company next week when I have funds available, as I’m still positive about the stock going forward.
For investors, reputational concerns are important, but ultimately the bottom line is what really drives a share price. Given that Boohoo is performing very well financially, I expect investors to buy the current dip in the share price, as they have done twice this year already. Until its finances start to be hampered significantly from reputational concerns, I don’t see the share price being materially depressed. With the share price quickly recovering from the previous two tumbles, it shows that there is strong long-term demand to buy the stock when some view the valuation as being cheap.
Add to this the success the firm has enjoyed even during the pandemic so far. Active customers have risen by 34% this year, showing the benefit of being an online retailer. So even with tiered lockdowns looking likely over the winter, Boohoo should be able to continue to operate at a profitable level.
I’m still positive on the stock, and think it represents a good buy for investors on any dips seen.