RE: Still a concern here.4 Apr 2022 22:56
jongle.
Just going to point out that inflation is, at this point, heavily "priced in" to stocks like these. The market doesn't react in slow motion, the inflation narrative has been building for 18 months. The reason the share price here went from nearly 400 to nearly 60 is because of that narrative. The market has already reacted. It has priced in much of the worst case inflationary scenario, and is now waiting to find out just how bad it is, and who it affects most and least, before it repositions into a recovery. It's waiting for a cue that perhaps it works out fine for companies like Boohoo. I imagine a few of us are here because we suspect that budget/discounting retailers with low cost products will pick up more business, not less, as people shirk big ticket items to buy the basics. Clothes are basics, verging on necessities; people don't stop buying clothes in a recession, nor as a response to inflation - they just seek them out where they can find them cheapest. Boohoo are pretty cheap, which is why I like this stock. Margins are healthy enough, and if they have to rise prices to maintain them, well... so are all their competitors. A rising inflationary tide lifts all ships. It seems well positioned to maintain its competitiveness - relative to its competitors, and that's all that matters. Moreover, Boo's target demographic is the one, arguably, least impacted by cost of living crises. Housing data suggests they're much more likely to still live at home, or on the back of student loans. Their bills are covered, often, by someone else. They are more insulated than most. And so Boohoo look to be more insulated than most.
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