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Why I Think Marks And Spencer Group Plc Is A Screaming Buy

M&S (LSE: MKS) (NASDAQOTH: MAKSY.US) is a company in which I have been an investor for a long time, but I think now is a great time to add to my holding.

For starters, shares in M&S have had a great year and are now the highest they have been in the post-credit crunch era. Indeed, they have risen by 25% in 2013 to their current price of 475p, which shows just how strong sentiment has been over the course of the year when the FTSE 100 has made gains of 14% over the same period.

However, I think the shares have further to go and that the stock market is buying into the strategy employed by the company — as evidenced by the strong sentiment. Therefore, I believe that the heady heights of £7+ which were last achieved in 2007, while some way off at the moment, are not beyond the realm of possibility.

In addition, shares have fallen slightly after reaching over £5 and, I feel, this could be a good entry point.

Of course, a bullish share price chart is not the only reason why I’m thinking of adding to my holding in M&S.

I also feel that shares offer good value for money at current price levels, as shown by a favourable price-to-earnings (P/E) ratio.

For instance, shares currently trade on a P/E of 12.8, which on an absolute basis is attractive when the quality of the company is taken into account. Indeed, I think that shares offer good value on a relative basis too, with the FTSE 100 trading on a P/E of 15 and the wider general retail sector (to which M&S belongs) trading on a P/E of 16.2.

Clearly, M&S is not perfect but I question whether such a wide discount to its sector and to the index is warranted. Therefore, I am optimistic that this discount will narrow over the medium to long term.

So, I’m bullish on M&S and am thinking of adding to my shareholding because the share price chart indicates that sentiment is strong, with shares reaching their highest level in over 6 years. Furthermore, a hefty discount to the sector and index P/Es is, in my view, unlikely to last over the medium to long term, so I think that now could be a good time to increase my stake.

However, M&S does not feature in a report produced by The Motley Fool that details 8 Shares Held By Britain's Super Investor.

The report highlights 8 holdings of star UK fund manager, Neil Woodford, and is available to Motley Fool readers free of charge and without any obligation.

With Neil Woodford announcing his departure from Invesco Perpetual, now could be a great time to find out some of his hot tips.

Click here to take a look at the report.

> Peter owns shares in M&S.