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MARKET COMMENT
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It's not uncommon at this time of year to get the odd festive share tip. You know the sort of thing. Buy Santa's Conglomerated Grottoes at 0.004p. The company is expected to see strong trading over the next few weeks that should more than offset the somewhat disappointing zero sales it has recorded in the first eleven months of the year. With the elf strike also now behind it, SCG is due a bounce. The trouble is, of course, that news of such events is already priced into the shares. Christmas, almost without exception you could say, comes round once a year. So it's unlikely that investors are going to get caught out by a sudden rush in sales. The same thing goes for companies likely to benefit from other major events, like the World Cup, or the new Harry Potter film or whatever. Investors look forward rather than backwards when assessing whether a share is appropriately valued. There are occasions, of course, when you can spot things in advance and benefit from other investors appreciating the boost in trading that will ensue. But these are rare. It's far more likely that, by the time you see something like this in the weekend newspapers, the bandwagon will have lost a couple of wheels, toppled over and caught fire. One company that could get caught in the Christmas tips rush is Majestic Wine (LSE: MJW), although it does look slightly more robust than Santa's Consolidated Grottoes, following today's 78% rise in half-time profits to £2.8m. It now has over 100 stores and plans to open half a dozen a year over the next few years. With its customers spending an average of £103 per visit it could be vulnerable to any downturn in the economy that may reverse or slow the trend in our increased consumption of wine. Nevertheless, pre-tax profits are expected to hit around £7.5m this year putting the shares on a prospective price earnings ratio of 15 times for the full year. Despite the good record since its flotation at 160p per share in 1996 -- annual sales were then just £50m profits £2m -- this rating is fairly pricey compared with other niche retailers. It may also become increasingly difficult for the company to generate growth and the shares won't be on my list for Santa.