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Should You Sell Double-Digit Risers Sports Direct International PLC, Ted Baker plc, Spire Healthcare Group PLC And Laird PLC?

Today I am discussing whether investors should book profits on several London risers.

Sports Direct International

Shares in trainer emporium Sports Direct (LSE: SPD) have galloped 15% higher during the past four weeks, extending the stellar run which started back in the spring. But rather than cash in, I believe investors should hang onto their shares as further gains appear likely — the Mansfield firm saw total revenues advance 4.7% in the 12 months to April 2015, a result that drove underlying pre-tax profit more than a fifth higher to £300.3m.

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With Sports Direct benefiting from Britain’s intensifying sports craze, not to mention fizzy demand for branded products at cheap prices, I reckon the retailer is a strong bet for brilliant long-term earnings growth. And with overseas expansion also rattling along, the City expects Sports Direct to report earnings growth of 11% in fiscal 2016 and 14% the following year, pushing a P/E multiple of 18.4 times for the current period to just 16.1 times.

Ted Baker

Likewise, I believe that savvy investors should hang onto hot British fashion label Ted Baker (LSE: TED) as demand from foreign markets surges. The stock has gained 13% during the past month as its steady upward march has continued, with market optimism boosted by bubbly June interims — these showed retail sales leap 18.9% during the four months to June, helped by massive investment in developed and emerging markets alike.

On top of this, improvements to its US website and a new Canadian online presence helped drive internet revenues 46.9% higher during the period. Given these factors Ted Baker is predicted to post terrific earnings growth of 21% for the year concluding January 2016, and 16% for the following period. So although these forecasts produce hefty P/E ratios of 32.5 times and 27.9 times respectively, I believe the designer’s brilliant growth prospects — not to mention great track record of generating excellent double-digit earnings expansion — fully merits this premium.

Spire Healthcare

Private healthcare provider Spire Healthcare (LSE: SPI) has seen its stock ascend 10% since the start of July, and I reckon the company still has plenty of legs as demand from NHS, self-pay and PMI patients keeps on rising. The group operates almost 40 hospitals and more than a dozen clinics in Britain, and following global operator Mediclinic’s acquisition of 29.9% of the firm in June I believe Spire’s expansion plans should receive a shot in the arm, while costs could also come down.

The abacus bashers expect Spire to enjoy an 11% earnings bump in 2015, producing a P/E multiple of 19.3 times. And this value falls to 18.4 times next year amid expectations of a further 2% rise. With the business also ploughing the cash into hot growth areas like radiotherapy, cancer care and orthopaedics, I fully expect revenues to keep charging higher.


Shares in technology play Laird (LSE: LRD) have gone absolutely gangbusters since the firm released its full-year results late last month, and the business has gained 14% during the past four weeks. The electronics manufacturer advised that revenues jumped 21% during January-June, a result that propelled underlying pre-tax profit 35% higher to £26.9m.

The business’ relationship with gadget giants like Apple continues to provide handsome returns, while massive investment across multiple tech areas — such as the rapidly-growing ‘internet of things’ sector — also promises to deliver resplendent returns. Consequently the City expects Laird to record earnings growth of 16% and 13% in 2015 and 2016 correspondingly, driving this year’s P/E ratio of 17.6 times to just 15.9 times for next year.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Sports Direct International and owns shares in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.


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