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£1000 to invest? Here is a must-own FTSE stock I would buy today

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ASOS (LSE:ASC) is a FTSE stock I really like. The online fashion site has seen demand increase due to the lockdown and restrictions on physical shopping for consumers. ASC last week also released favourable full-year results so here’s why it’s one of my must-own stocks right now.

Online is king

Across the FTSE you will see traditional high street retailers struggling to survive. The impact of high business rates on smaller businesses and larger retail chains overextending their capabilities to respond to changing demand are a couple of reasons this is happening. In my opinion, however, online shopping has changed how we shop. ASC has been a huge beneficiary from this, especially during the Covid-19 pandemic.

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According to a recent report, online transactions now account for 19% of all retail sales in the UK and that figure is set to increase to 53% within the next 10 years. Convenience has been a huge factor for many shoppers, being able to shop from the comfort of their own home on a smart device. Statista says that 1.92bn people around the world now shop online, which is close to a third of the world’s population.

FTSE champion

With close to 1,000 brands available on its site, and shipping to almost 200 countries, ASC is a powerhouse. It embodies the world we currently live in, offering all your clothing and fashion needs without trawling through high streets with a mask on, queueing for entry.

Last week ASOS released its full-year results which were impressive and what I expected. Total sales grew by 19% across all territories. There was an 18% increase in the UK, 22% in the EU, 18% for the US, and the rest of the world saw an 18% rise too. Profit before tax increased to £142.1m, an increase of £109m on the previous year. A big factor to the favourable financials was the fact ASOS acquired over 3m new customers to the year ending 31 August, which is a mightily impressive number.

Rewind to last year’s results and ASOS had a net debt of £90.5m. This year’s positive results have turned that debt into a net cash position of £407.5m. Many FTSE retail companies are overhauling their returns policy due to the pandemic and it seems ASC have benefitted from this too. It seems they are experiencing less returns than ever before.

Why I would buy now

Overall, ASC has had an excellent year which is why I have labelled this must-own. In 2020 ASOS has seen its share price increase over 40% which is great performance in my opinion in the face of a global financial crisis. Currently shares can be purchased for just under 4,900p per share.

I would recommend adding ASOS to your portfolio as I feel it is a long-term investment that will continue to grow and deliver positive results. In my opinion recent events show that further lockdowns, the way we live, shop and interact could change for the foreseeable future. With that in mind, technology companies like ASOS (among others in the FTSE index) will continue to thrive and could make you money as a shrewd investor.

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Jabran Khan has no position in any 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.

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