Category Archives: $SGP

LON:ASC (Asos) continues to go lower – should you buy here?

Investors and customers of fashionable retail stocks join and leave in Herds!

Look at the chart of SuperGroup (SGP), KORS (Michaeal Kors) and COH (Coach) – they all gain popularity with customers, then the stock prices show high growth expectations as investors get involved, these growth rates are normally very difficult to achieve, as in order to meet expectations sales have to rise – but then the brands lose their appeal as they become more popular, creating the opposite effect – a glut in inventory, discounting and a fall in sales and margins!

So, buying high flying retail stocks above 30% 5Y Growth is a dangerous game… Asos reached an incredible 70% implied growth over 5Y when at 70 pounds only 6 months ago!

If you want to get into a fashionable retailers, buy when the implied growth is reasonable and you think the brand is sustainable (like Next!)

2CentView Fair values and 5Y implied growth

Asos 2000 (30%)
SGP 950 (10%)
KORS $64 (17%)
COH $36 (13%)

$SGP (SuperGroup) – getting crushed – how do you manage a core position which is going wrong…

Traded $SGP from 3 to 14 – leaving a core position from the profits. Stock has halved from the highs of nearly 17.

The core position is a long term zero or low cost position in a company you like and should only be sold when the company goes into an irreversible decline – but at the same time you do not want to give up all your profits – even though it is the House’s money!

You know that feeling on the BlackJack table when you are up a lot and then go back to flat – not nice as you always want to leave the table a winner!

Think the rule should be if a core position does decline by more than 40% from the high start selling some and ALL of it hits 50% from the high.

FV=875 on $SGP
A good entry point would in the 750 – 800 are if you like SuperGroup, looking to retrace the move back to above 900! Stop 675.

UK Budget – Pension Shakeup “We plan to overhaul the system completely”…..

The government made a huge change to pensions – from 2015 you can do what you want with your private pensions at 55 subject to marginal tax rate. This mean that you are NOT forced to buy a stupid Annuity or have income drawdown restrictions on your personal pension!
Download the udget_2014_greater_choice_in_pensions_explained.pdf from the government web site.

For example if you had 400k in your private pension then take 100k as cash tax free, the rest you can take out subject to normal tax rate in that year – so if you have retired at 55, and take out only 10,500 you pay no TAX!.

Hargreaves Landsdown stock – the provider of SIPPS rallied 15% on the news and the annuity providers were sold off – it is anticipated many more will contribute to SIPPS.
So plan to have 400k at least in your private pension by 55 – then sell the Porsche for a LAMBO! or pay any debts on your buy to let portfolio or buy the villa in south of france…..its entirely up to you..

Construct your portfolio now of the following:

Recovery plays – Good Companies which are broken but are coming back.
Stocks below have made dramatic gains in less than 3 years:
Sports Direct 60 o 800
Thomas Cook 20 to 180
SuperGroup 300 to 1700
DIxons 20p to 50p
HPQ 12 to 30
RiteAid: 1.50 to 6.50

2CentView model identifies when broken companies earnings expectations are expected to rise but the stock price has not reflected this change.

Low Beta Income stocks

BP, DLG, Scottish and Southern – now SBRY.
Buy these companies when there is potential upside of 15%-25% and dividend carry of between 4 and 6%. e.g. $SBRY FV=360, carry = 6%!

Growth Stocks
the Hardest to play – you need to know what you are paying for the growth and whether you think it can meet these expectations (use the PEG as a guide). If you are right gains will be big, but so also is the risk – the stock will be savaged and you will lose a lot if the company fails to meet the expectations.
Important to stick to stops on these.
2CentView model shows that growth stocks fall into 4 categories (over 5 years): low (5-15), moderate (15-35), High (35-50), Super(50-80)

Low: Apple, MSFT, HPQ, IBM, Oracle
Moderate: Google, GOGO, FSLR
High: FaceBook, AMZN, NetFlix, Tesla, GIMO
Super: FUEL, Twitter

Market will rise and vol week to week, how do you trade this?

2Centview strategy is to buy stocks with potential upside of between 15% (low risk names) and 100% (high risk names) so that stops can be set outside of the normal market volatility of up to 10% (VIX Norm)

So if you are down 5% or so then is ok – but if the market continues to fall then make sure you take your losses when stops are hit – and look for opportunities when the market cheapens up. However, if the overall trend is down, then you may be end up converting your stock positions into cash as more stops are hit – which is ok also – there is the possibility of the armaggedon situation – war between the USA and Russia!

However, keep your core positions (positions you have built up with zero or little cost) for longer term – unless they go into secular decline. I made the mistake of selling some of my core $SGP position at 14 – it is now 16.68!

So buy $SBRY stock now if you have not – FV=360, Yield = 5% – good defensive play with carry and upside. But Set a stop of of 275. UK Supermarkets may go into another price war.

More ideas to follow if market continues to cheapen up. If you have to be in to WIN IT but if you are doom and gloom merchant then keep away!

$sgp supergroup hit my target of 14

$SGP hit my target of 14 stock has almost retraced back to its highs over 18months giving. 344 percent return …thanks for the tip @_SebMeyer. Sold some of my core position.
Now on 26% implied growth over 5 years so not over expensive but i would be a buyer again below 12 Retailers are like tech stocks we follow them in herds and leave them in droves Underweight now in retailers so looking for another good buy

Google Financial Quotes

Google Finance Chart