Shares in discount online fashion retailer Mysale (LSE: MYSL) are up over 10% today after the company released a positive update. It stated that it expects to deliver a rise in sales for the full-year to the end of June 2015, with its performance stepping up in the second half of the year.
Furthermore, Mysale reported that its fourth quarter was profitable, with gross margins having improved as a result of driving through cost savings and making its business more efficient. This, combined with improving demand for the company’s products, means that the health of its bottom line is improving. As such, shares in the company have risen by over 10% today on the back of the release.
Despite this, Mysale’s share price is still down 78% since it listed in June 2014, with a challenging Australian economy hurting its financial performance and leading to a severe profit warning late last year. As such, investor sentiment remains relatively weak despite the company having been backed by major UK retail players such as Sir Philip Green and Mike Ashley.
However, today’s improved outlook, coupled with the appointment of a new Chairman, could be the start of an improved period for the business. And, with Australian monetary policy becoming increasingly loose, as well as an improved outlook for other key markets such as the UK, Mysale may be able to continue the strength that it has shown in the final quarter of its financial year. Prudent investors, though, may wish to await further evidence of this before buying a slice of the business.
Meanwhile, consultancy company WYG (LSE: WYG) has been up by as much as 5% today despite no significant news flow having been released by the company. Of course, investor sentiment has been improved since the company announced a new £25m revolving credit facility last week and, looking ahead, the company’s shares have significant capital gain potential over the medium term.
That’s because WYG is expected to post a rise in its bottom line of as much as 11% next year, which is an impressive growth rate. Despite this, the company trades on a price to earnings (P/E) ratio of just 11.8, which equates to a price to earnings growth (PEG) ratio of only 1. This indicates that the company’s share price could continue the run that has seen it rise by 11% since the turn of the year.
Furthermore, WYG has significant income potential, with its yield of 1.2% having the scope to rise substantially in 2016 and beyond. That’s because, at the present time, WYG pays out just 14% of its net profit as a dividend, which indicates that dividend payouts could move much higher. For example, if it were to pay out half of its profit as a dividend, it would equate to a dividend yield of 4.3%, which is very enticing. And, with its bottom line set to grow at a brisk pace, shareholder payouts could move upwards very quickly, thereby making WYG a stock with great income potential as well as capital gain prospects.
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Peter Stephens 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.