RE: Value stocks3 Dec 2021 15:18
You got to laugh at how boohoo keeps selling off. A new variant that could potentially close retail....boo goes down. Recovery after initial broad sell-off....boohoo goes down. US tech goes down.....boo goes down. Its odd how this is following the likes of pubs and retail down. Just goes to show how bad things have got in terms of sentiment for boohoo, asos ect.
Boo is snagging every single negative sentiment out there, but I strongly believe this is purely psychological. With this new variant, this could change inflation expectations, loosen supply bottlenecks, reduce shipping costs as oil has tanked, decrease return rates and readjust margins back to high single or low double digits again.
This simply has to turn. Fundamentally, the company is sound. A single positive catalyst and positive sentiment should return and compound. A forward pe in the teens for this sort of growth is laughably cheap. Is it because of increased competition? Some may say this, but there are absolutely no signs in terms of boohoo sales to suggest this whatsoever, and are still growing at a fair clip and making interesting acquisitions such as Debenhams, which could reaccelorate growth even further.
Until then hovever, guilty until proven innocent and this just keeps getting cheaper. Who knows how low sentiment could drag this down.