Is this online retailer 1 of the best shares to buy now?

Looking for the best shares to buy, this Fool takes a closer look at this online retailer that specialises in homeware and clothing.

| 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.

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Could direct home shopping retailer N Brown Group (LSE:BWNG) be one of the best shares to buy now for long-term growth? Let’s take a closer look at the pros and cons of me buying the shares.

Digital retailer

As a quick reminder, N Brown is a top 10 digital UK clothing and footwear retailer. With over 160 years history of trading, it employs close to 1,800 people in the UK. You may have heard of some of its retail brands including JD Williams, Simply Be, and Jacamo.

So what’s happening with the N Brown share price currently? As I write, the shares are trading for 25p. At this time last year, the stock was trading for 53p, which is a 52% decrease over a 12-month period.

Many stocks have come under pressure due to macroeconomic headwinds and the tragic events in the UK, and N Brown is no different. This includes many of my best shares to buy. Could this stock be a bargain with a view to a long-term recovery?

To buy or not to buy?

So what are the pros and cons of me buying N Brown shares?

FOR: I like the look of N Brown’s diversified business model. It is a leading retailer in the plus-size clothing market through its brands Simply Be and Jacamo. Furthermore, it also targets the more affluent 45-65 year old through JD Williams. Despite near-term challenges, this diversification could be the key to growing revenue and profit, and providing returns to its investors.

AGAINST: Well documented macroeconomic issues could hamper N Brown. Soaring inflation, the rising cost of materials, and the global supply chain crisis could have a material impact on profitability and operations. With costs rising, N Brown could see margins squeezed. In addition to this, operations could be affected due to supply chain constraints. All this could impact any returns I would hope to make as an investor.

FOR: I do understand that past performance is not a guarantee of the future. But looking back at N Brown’s track record, I think this is a positive point. I can see it has recorded consistent revenue and profit for the past four years. This was even during the challenging pandemic period. I want to see performance levels return past pre-pandemic levels, although 2022 results weren’t far off. Finally, the shares look good value for money on a price-to-earnings ratio of just seven.

AGAINST: The rise of online fast fashion, and the shift away from the high street has been seen as a positive by many. For N Brown, this is an issue for me as it means competition is more intense than ever. Competitors will try to take market share and this could have an impact on performance and returns in the longer term.

My verdict

I think N Brown Group is a bit of a hidden gem with excellent growth prospects ahead. The shares currently look dirt cheap and I’m buoyed by its diversified business model. Its long trading history and roots also help me believe that it has the experience and know how to navigate stormy waters.

Overall I would be willing to add a small number of N Brown shares to my holdings and keep hold of them for the long term.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Newspaper and direction sign with investment options
Investing Articles

When cheap markets meet favourable conditions, sentiment flips very quickly

London’s stock market is cheap — some sectors, even cheaper. Given a change in sentiment, the uprating could be substantial.

Read more »

Investing Articles

Empty Stocks and Shares ISA? I’d snap up these 3 stocks to start with!

Sumayya Mansoor explains how she would start to build wealth from scratch with an empty Stocks and Shares ISA and…

Read more »

Concept of two young professional men looking at a screen in a technological data centre
Investing Articles

7.7% yield and going cheap! Why is this unknown FTSE 250 stock flying?

It's no household name, but there's one FTSE 250 stock with a high dividend yield and booming profits that looks…

Read more »

Photo of a man going through financial problems
Investing Articles

I’d stop staring at the Nvidia share price and buy this FTSE 100 stock instead

This writer reckons there is a smarter way to invest in Nvidia today without taking on stock-specific risk. Here is…

Read more »

Young lady working from home office during coronavirus pandemic.
Top Stocks

5 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Young Asian man drinking coffee at home and looking at his phone
Dividend Shares

These 3 FTSE 250 stocks offer me the highest dividend yields, but should I buy?

Jon Smith considers FTSE 250 shares with a very high yield, but questions whether the income is going to be…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Is FTSE 100 takeover target DS Smith a great buy?

A mega-merger between FTSE 100 giants DS Smith and Mondi has the City abuzz. But is there any value in…

Read more »

Young Black man sat in front of laptop while wearing headphones
Investing Articles

The WPP share price dips as profits fall. Here’s why it could be a top dividend buy

I'm starting to think the WPP share price undervalues the stock, especially if the long-term dividend outlook comes good.

Read more »