Should You Buy Boohoo.Com PLC, Globo Plc & Asian Citrus Holdings Limited Ahead Of Results?

Is now the perfect time to buy Boohoo.Com PLC (LON:BOO), GLOBO Plc (LON:GBO) and Asian Citrus Holdings Limited (LON:ACHL)?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

The shares of smaller companies can often move up — or down — dramatically on the release of their results. On such occasions, investing ahead of imminent results can bring big rewards in short order — or an equally hefty fall in the value of your investment.

Today, I’m looking at the likelihood of a big upward or downward move in the shares of Boohoo (LSE: BOO), Globo (LSE: GBO) and Asian Citrus (LSE: ACHL), which all have results just around the corner.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!


If you’re a long-term investor, looking for a nice kick-start to your investment — as opposed to a short term trader — you’ll want to be convinced that you’re buying into a good business.

I believe fast-fashion etailer Boohoo is a good business, and that the barriers to new entrants to online fashion are higher than many people may think. Boohoo is run by canny rag-trade veterans with long-standing sourcing relationships, which aren’t easy to replicate, and is of a scale to market heavily (essential for success in this type of business), while new entrants typically lack the requisite capital and cash flows.

As the table below shows, Boohoo is highly cash generative, its operating cash flows growing rapidly ahead of the amount of cash it invests.

  2011 2012 2013 2014 2015 Total
Net cash from operating activities (£m) 1.9 1.5 5.6 5.9 12.2 27.1
Net cash used in investing activities (£m) 1.7 0.3 4.6 4.6 7.8 19.0

Boohoo disappointed early investors when the market pumped the shares up to a silly valuation, then sent them crashing when the company had a hiccup with a new warehouse IT system that delayed the launch of last year’s autumn/winter range.

The shares currently look good value at 30.75p, with cash on the balance sheet of over 5p a share. The forecast cash-adjusted price-to-earnings (P/E) ratio for the current year is 24, falling to 19 next year, which appears generous for the growth on offer.

Boohoo last updated the market in June, and I think the company has potential to surprise on the upside in its half-year results next Tuesday. My impression is that there’s been some intense marketing during the period and I suspect there’ll also be good news on the early performance of the company’s recently-launched app. All in all, I would rate Boohoo as a buy today.


Mobile solutions firm Globo is also scheduled to release its half-year results next Tuesday. My fellow Foolish writers are resoundingly bullish on this stock, marking it down as a top pick, and pointing to a P/E ratio of 3.2 and a PEG ratio of 0.2, among other things. You may want to have a look at those articles for some positive balance to my rather more negative take on Globo.

My first concern is that those bargain ratios are simply way too low for a high-growth company. The market is effectively saying that there is something wrong with the business. I think it’s instructive to look at the same cash flow measures that I looked at for Boohoo.

  2010 2011 2012 2013 2014 Total
Net cash from operating activities (€m) 2.7 5.0 13.2 20.6 31.0 72.5
Net cash used in investing activities (€m) 7.1 13.0 18.3 19.3 32.8 90.5

As you can see, Globo’s profile is the mirror opposite of Boohoo’s virtuous habit of funding its investing activities from its operating cash flows. Can Globo only grow by spending more cash on investing than it brings in from its operations? Globo has today announced that another acquisition (for €14m) is in the offing. The company is also currently trying to raise $180m by issuing high-yield bonds for yet further acquisitions.

I’m unconvinced by Globo’s business, but, if you’re positive about the company, should you invest ahead of the results? Well, if Globo really is the bees knees, the trading multiples won’t stay as low as they are now forever!

Asian Citrus

Asian Citrus is due to release its annual results on Friday. This is an AIM-listed Bermuda-registered holding company that owns, through its subsidiaries, fruit plantations in the People’s Republic of China (PRC).

Asian Citrus was admitted to AIM just over 10 years ago, and so has lasted longer than many holding companies of PRC businesses that have come and gone from AIM, leaving investors with little or nothing. Concerns have been expressed about Asian Citrus’s related party transactions and asset valuations, while weather problems and crop diseases seem to regularly blight performance.

I don’t consider Asian Citrus to be investment grade material. The company warned earlier this month that it expects to report lower turnover and “significantly higher” losses than last year. I suspect results-day risk for the shares may be on the downside, because “The audit now being conducted by the auditor of the Company on the management accounts has not yet been completed and the management accounts may still be subject to adjustments”.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

G A Chester has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

This cheap share fell 30% last week. I’d buy now

This huge US corporation saw its shares crash by 30% last week. But I'd buy this surprisingly cheap share now…

Read more »

Various denominations of notes in a pile
Investing Articles

These 7 shares produce passive income of 7% to 11% a year!

Passive income is extra money I make without working. By buying these seven shares, I could earn 8.9% a year…

Read more »

A person holding onto a fan of twenty pound notes
Investing Articles

6.6%+ dividend yields! 2 FTSE 100 dividend stocks to buy

Finding the best dividend stocks to buy requires extra care today as soaring inflation takes a bite out of shareholder…

Read more »

Arrow symbol glowing amid black arrow symbols on black background.
Investing Articles

At 85p, are Rolls-Royce shares a slam-dunk buy?

The Rolls-Royce share price is in penny stock territory. Roland Head explains why he thinks this FTSE 100 stalwart looks…

Read more »

Business development to success and FTSE 100 250 350 growth concept.
Investing Articles

‘Big Short’ investor Michael Burry is buying this quality growth stock! Should I?

In the first quarter, Michael Burry bought more of this growth stock. Is this a hint that I should also…

Read more »

A beach at sunset where there is an inscription on the sand "Breathe Deeeply".
Investing Articles

Stock market crash: here’s why falling prices is good news

Over in the US, a stock market crash is battering high-priced stocks. But I see falling shares as an opportunity…

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

These 5 FTSE 100 shares crashed in 2022. I’d buy 1 today

Although the FTSE 100 index is flat in 2022, some Footsie shares have crashed hard this year. But I see…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

How investors can boost their passive income when the FTSE is falling

Stock markets are plagued with fears right now. Here's why I firmly believe those fears improve our passive income prospects.

Read more »