Remaining very cautious 18 Jun 2014 23:11
Good bounce here today mainly fuelled by the investec note.
I am keen to start buying here but feel this is still way too high on the current market cap of 860 million.
Here is why - the net asset value is around 230 mill and the yearly net profits are only around 30 million. This therefore places a great deal of emphasis on the intangible value ie the superdry brand.
As mentioned yesterday I am a great fan for the following reasons, they look good and fit well, the material used is excellent and they also wash very well.
The brand is going global and India, china, Russia, Australia and Japan will hopefully be key to the future growth potential.
I piled in at 2.70 with 15,000 quid after the accounting error, and was absolutely fascinated by the way people commenting that the brand was over the hill, and Julian was a basket case who could not manage the company or the growth.
Luckily for me I ignored the negativity and went with my instinct at the time.
I feel this time is very different they are poles apart from where they were and that is why £3 is not in the equation any longer.
However, and it is a big however, the markets are at all time highs, interest rates are at the lowest levels ever and personal, corporate and global debt is at truly unsustainable levels. This is why I reckon we could see a big drop here as the masses will not be to afford a £60 hoodie or a £200 jacket any longer. The banks simply cannot keep lending as they are!
I am putting my hands in my pockets until £5 is upon us , I may miss the boat and will be gutted as when the bull cycle returns in 5-7years plus this will be over £20-£25 quid again.
My thoughts only good luck all :)
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