Superdry

Superdry (LSE: SDRY) is a clothing company. It designs, produces, and sells clothing items and accessories. This is done primarily under the Superdry brand. With the Superdry share price down by 35% this year, a huge director transaction was executed. The purchase of a large sum of shares could boost investor sentiment.

• Name: Julian Dunkerton
• Position of director: Chief Executive Officer
• Nature of transaction: Acquisition of shares
• Date of transaction: 27 May 2022
• Amount purchased: 1,805,172 @ £1.42
• Total value: £1,144,954.58

Foxtons

Second on the list of director dealings is Foxtons (LSE: FOXT). The firm is a British-based estate agency. Foxtons serves as a go-between to buy, sell, and let properties. The Foxtons share price has had a slight hiccup this year, down 5%. A high-ranking director took the opportunity to purchase a substantial amount of shares.

• Name: Nigel Rich
• Position of director: Chairman
• Nature of transaction: Acquisition of shares
• Date of transaction: 30 May 2022
• Amount purchased: 140,000 @ £0.39
• Total value: £54,180

Big Technologies

Last on the list of director dealings is Big Technologies (LSE: BIG). Big Technologies provides products and services to the remote and personal monitoring industry. It does so under the Buddi brand name in the United Kingdom, Australia, the US, and Colombia. Its share price is firmly in the red at -15% this year. However, this didn’t stop a top director from transferring a number of leftover shares to his self-invested personal pension (SIPP) account after buying and selling.

• Name: Daren Morris
• Position of director: Chief Financial Officer
• Nature of transaction: Acquisition of shares
• Date of transaction: 27 May 2022
• Amount purchased: 10,000 @ £2.91
• Total value: £29,100

• Name: Daren Morris
• Position of director: Chief Financial Officer
• Nature of transaction: Disposal of shares
• Date of transaction: 27 May 2022
• Amount sold: 10,000 @ £2.83
• Total value: £28,300

• Name: Daren Morris
• Position of director: Chief Financial Officer
• Nature of transaction: Acquisition of shares
• Date of transaction: 30 May 2022
• Amount purchased: 15,000 @ £2.82
• Total value: £42,300

• Name: Daren Morris
• Position of director: Chief Financial Officer
• Nature of transaction: Disposal of shares
• Date of transaction: 30 May 2022
• Amount sold: 15,000 @ £2.81
• Total value: £42,150

Types of shares in a SIP

To provide context, there are a few types of shares within a company’s share incentive plan (SIP). A SIP is an employee plan for companies within the UK to flexibly award equity to employees. Publicly listed companies normally exercise this option because it’s tax-efficient for both the employer and its employees.

In this instance, partnership shares were bought and sold from the deals listed. Employees are usually allowed to buy shares on a monthly basis through a SIP. But they can also buy shares at the end of an ‘accumulation period’. If there is one in effect, employees can buy shares at the market value either at the beginning or end of the period.

The post Director dealings: Superdry, Foxtons, Big Technologies appeared first on The Motley Fool UK.

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John Choong has no position in any of the shares mentioned at the time of writing. The Motley Fool UK 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.

Superdry shares continue to fall

As a quick reminder, Superdry is a UK clothing brand with a focus on products combining vintage American styling with Japanese-inspired graphics. It has an extensive presence throughout the world, operating in 740 branded stores across 61 countries.

So what’s the current state of play with the Superdry share price? Well, as I write, the shares are trading for 144p. At this time last year, the shares were trading for 394p, which is a 63% drop over a 12-month period.

I believe Superdry shares have fallen in recent times due to the drop in popularity of its brand, coupled with the rise in online-based fast fashion alternatives. Furthermore, the demise of the traditional high street shopping experience, on which Superdry relies heavily with its bricks and mortar stores, has not helped.

The investment case

Let’s take a closer look at Superdry’s recent performance record. I do understand that past performance is not a guarantee of the future, however. It does not make for good reading, in my opinion. Looking back, I can see that revenue and gross profit has been falling for the past four years.

But what about Superdry’s recent performance? Well its last trading update was an interim report for the six months ending 23 October 2021 that was released in January. Revenue was down 1.4% compared to the same period last year. I did note some positive signs, with Superdry reporting a profit of £4m, compared to a loss of £18m last half-year period. Gross margin and earnings per share respectively also increased.

Superdry’s management has taken steps to combat the falling share price and ailing performance. Some of these included releasing five new capsule collections to refresh its offering. Next, it has decided to use sustainably sourced materials for over 30% of its portfolio of products. This should please ethical consumers and investors, especially with the recent rise of ESG investing in recent years.

Finally, Superdry is looking to increase efficiency and make cost savings in its warehouse operations through the use of robots for online operations. Some of these initiatives, if not all, could help boost Superdry shares in the longer term.

What I’m doing now

Everything considered, the negatives far outweigh the positives for me in respect of Superdry returning to former glory. I do understand that some of the steps it is taking will take time to yield tangible results and affect performance levels.

Superdry is competing in a saturated market against companies with better business models and a loyal brand following. It will need to work hard to return to consistent performance and growth, in my opinion.

Another worry is soaring inflation and the rising cost of raw materials. This could impact Superdry’s production process and squeeze profit margins. I would not buy Superdry shares for my holdings currently, although I will keep an eye on developments.

The post Should I buy Superdry shares? appeared first on The Motley Fool UK.

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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.

A look at Superdry’s financials

Financially, it was not the most successful year in Superdry’s history, leading some to speculate on whether its nascent recovery would continue or not. Releasing a trading statement for the financial year to 24 April last week, we saw how its performance was it hard. Revenue fell 21% year-on-year (YoY) from £704m to £557m. Store-generated revenue took the brunt of this, falling 51% from £287m to £141m, due to obvious, Covid-related, reasons. 

However, most retailers suffered in the past year and Superdry still had its e-commerce card to play. Online retail sales grew 34% to £203m, from £152m a year ago.

CEO Julian Dunkerton was impressed with this e-commerce performance, saying the strengthened e-commerce presence helped mitigate the impact from enforced store closures.

He also said the firm returned to revenue growth in Q4 — which was an important development — and its full-price stance over the period meant a “significant online margin improvement”. 

And of course, revenue generated through online retail will be supplemented by the reopening of stores nationwide as lockdown easing continues. 

Superdry’s share price performance

Last Thursday, Superdry stock soared 16% following its update for FY21. With revenue falling, I could be asking myself why?

Well, as explained above, e-commerce holds a lot of promise for the company, as does the ongoing economic reopening. What’s more, Q4 2021 was a promising preview of what that economic reopening means for the business moving forward. Group revenue for Q4 increased by 0.8% to £118m, with a 26.6% rise in e-commerce sales and a 13.5% rise in wholesale offsetting a 51.5% drop in store sales. 

And despite its dramatic full-year drops in revenue, company liquidity remained strong. Net cash came in at £39.4m vs £36.7m in the previous year.

My biggest concern about Superdry’s share price

Fashion is a tough industry and product missteps can devastate sales. The rise of pure-play online retailers, such as ASOS, has provided Superdry with stiff competition. This has also posed a threat to the power of its brand, which is not quite what it used to be, in my opinion. Should Superdry be unable to buck its current long-term downward trend, it may have further to fall. 

Growth potential

Yet I have been very impressed with Superdry’s ability to get through Covid-19 and remain liquid. Despite such heavy revenue losses, the fact that it can maintain positive cash flow and boost its online segment presents a lot of hope for its long-term potential. 

And with Superdry’s share price currently just a fraction of its five-year-high (2,074p in January 2018), I believe its potential to return to those heights would make it a worthy investment for me if I had £1,000. 

The post The 1 retail stock I’d buy now with £1,000 appeared first on The Motley Fool UK.

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• Is this news a minor development for Greggs shares – or potentially a major one?
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Jamie Adams holds no position in Superdry. The Motley Fool UK 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.

What caused this enormous spike? And should I be adding this business to my watch list?

The surging Superdry share price

The collapse of the Superdry share price in 2017 serves as an excellent example of a company expanding its reach but ultimately failing to retain its market share. Given the difficulty of succeeding in the fashion industry, this is not an uncommon story.

But is the recent surge in share price a sign that Superdry is making a comeback? Maybe. The primary driver behind this boost is the publication of its full-year results between April 2020 and April 2021. As expected, total revenue took quite a big hit. It continued its decline from £704.4m to £556.6m or a 21% reduction. Obviously, this wasn’t good news. So why did the share price go up by so much?

While the overall revenue dropped, a closer inspection did show some encouraging signs. E-commerce has slowly gained popularity within the fashion space and companies like Boohoo and ASOS have successfully managed to take advantage of it. But selling clothes online is something that Superdry has struggled to adapt to and is likely a contributing factor to its fall from grace among consumers.

Yet last year, online sales grew considerably from £151.6m to £202.9m year-on-year. As such, e-tail now represents around 36% of the total revenue stream. By comparison, in 2018, this figure was closer to 18%. The boost resulted in revenue for the fourth quarter growing, albeit by only 0.8%. And that looks like it could be the start of a turnaround, so investors went into a buying frenzy, causing the Superdry share price to explode.

What’s next for the business?

Seeing e-commerce become a more prominent part of Superdry’s revenue model is an encouraging sign to me. Why? Because strength in online sales really is crucial to the future of fashion retail.

Having said that, it’s hardly free from risk. We’ve already seen what happens when a clothing brand loses its popularity. And with many of its stores being closed throughout the majority of 2020, it’s difficult to discern whether the growth in online sales is sustainable in a post-pandemic world.

The bottom line

With high street footfall back on the rise as lockdown restrictions begin to ease, Superdry looks like it’s in a good position to start seeing growth again in its physical stores. But today, fashion missteps can seriously dent a brand’s appeal. And looking at its track record, the company, in recent years, has failed to keep up.

Personally, this isn’t a business I’m interested in owning, so I won’t be adding any shares to my portfolio. But what if Superdry can increase its online strength and recapture consumers for its brand? In that case, I do believe its share price could perhaps one day return to its highs of 1,900p. Whether that will happen, only time will tell.

The post Why did the Superdry share price explode last week? appeared first on The Motley Fool UK.

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Zaven Boyrazian does not own shares in Superdry. The Motley Fool UK 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.

Like most listed companies with a high street presence, fashion retailer Superdry (LSE: SDRY) was pummelled by the coronavirus in 2020. By mid-March last year, its shares were changing hands for just over 100p. Since then however, they’ve bounced roughly 150%! Could there be more to come now the company’s been allowed to re-open its stores?

Superdry shares: positives and negatives

Based on the general reaction from consumers, things certainly look encouraging. By yesterday afternoon, reports suggested that high street footfall was nearly double that recorded last week. Although Superdry wasn’t explicitly mentioned, I’d imagine more than a few people wandered into its stores. 

There are also reasons to be positive on the company’s ongoing ‘reset’ after years of underperformance. Back in January, CEO and founder Julian Dunkerton said Superdry was making “great progress” with its “influencer-led, digital marketing strategy.” This included a new partnership with football star Neymar Jr. As someone with 143m followers on social media, that looks to be quite a coup for the business. 

But will all this be sufficient to resurrect its image among younger shoppers? I’m not so sure. Long gone are the days when Superdry was the fashion brand to be seen wearing. Online giants such as Boohoo and ASOS, I’d argue, are now far more popular with Superdry’s original demographic. On top of this, the company’s balance sheet is a lot less robust than it once was. To be clear, it’ll be a feat for the company to return to the days when the shares changed hands for 2,000p a pop (2018). 

A more general argument against buying shares in any UK retailer now is that the rush to the shops will prove short-lived as savings made during lockdown run out. Alternatively, those who are able to continue spending will be more likely to go on holiday abroad or enjoy more time in pubs and restaurants. 

Superdry is a great example of the adage that investors should buy ‘when there’s blood on the streets’. Notwithstanding this, I wonder if the rally is almost done.

Better bet?

One example of a company I’d buy over Superdry shares right now is XP Power (LSE: XPP). A world away from the high street, the mid-cap manufactures critical power control components. Its share price is up over 9% this morning following the release of a decent trading update. 

While order intake over the three months to the end of March was pretty much flat relative to the same period in 2020, it was actually up 32% from the previous quarter. Partly due to a buoyant semiconductor sector, this goes some way to showing how well XPP has recovered from the pandemic. All told, revenue rose 16% to £57.1m over Q1.

Based on the current demand for its products, I can see this rebound continuing. Aside from this, XPP’s balance sheet looks solid with only £18.4m in net debt. Although not an income stock, news that the mid-cap would return 18p per share in dividends for Q1 is another sign of confidence.

Sure, nothing can be guaranteed. XP acknowledged today that Covid-19 uncertainty could still impact business. Moreover, at 25 times earnings, the shares weren’t exactly cheap before markets opened this morning. They’ll now be even more expensive!

Nevertheless, I’d buy this hot growth stock over a still-troubled retailer any day.  

The post Is it time to buy Superdry shares? appeared first on The Motley Fool UK.

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Paul Summers owns shares of boohoo group. The Motley Fool UK has recommended ASOS, boohoo group, and XP Power. 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.

However, there’s a long road ahead, and I can still see a number of risks for shareholders. I think it will be at least five years before the mine turns a profit. Until then, the SXX share price is likely to remain volatile.

In my opinion, there are better opportunities for investors elsewhere in today’s market. Here, I’m going to look at two stocks I think are of more immediate interest.

Ahead of expectations

I’m staying with the mining theme for my first pick. For investors who’ve bought at the right times, Egypt-based Centamin (LSE: CEY) has delivered attractive returns. I think we may be seeing another such buying opportunity.

During the first quarter of the year, the company reported a better-than-expected set of mining results. Gold production at the Sukari mine was 116,183 ounces during the period, ahead of forecasts for 105,000oz-115,000oz. Costs were at the lower end of the firm’s previous guidance and the grade — or gold content — of the ore extracted from the firm’s underground mine improved.

A turning point?

Back in February, I flagged up risks at Centamin, pointing out costs had risen and gold production had fallen for a number of years. However, news flow since then has generally been positive and the price of gold has risen significantly.

Centamin should benefit directly from the higher price of gold, as the company doesn’t hedge any of its output. This is made possible by a solid financial position — at the end of March, the company had cash and liquid assets of $332m and no debt.

The shares don’t look cheap, on 19 times forecast earnings. But the dividend yield of 4.6% should be backed by surplus cash and the company is due to release guidance for 2020 and 2021 in the next few weeks. If positive, this could provide further support for the shares. I’d view Centamin as a speculative buy.

A great comeback story?

Superdry (LSE: SDRY) interim boss Julian Dunkerton is back in the hot seat at the fashion retailer he co-founded in 2003. I think the problems he faces can be explained with a simple comparison:

That’s right. The company’s sales have risen by 80% since 2015, but underlying profits have fallen by 34%. Profit margins have collapsed.

This suggests to me Superdry’s product ranges have lost their appeal, resulting in heavy discounting. Dunkerton certainly believes the management team who took over following his departure are largely to blame for the company’s problems.

One of the business’s previous hallmarks was that discounting was limited. Dunkerton plans to return to this with fresh design and a constant flow of new products, which he believes will support full-price sales and a premium brand message.

I could fill some space here with a discussion of the group’s finances. But to be honest, I don’t see much point. If Dunkerton can deliver his promise to return the company’s profit margins to 10%+ in three years, then I believe the shares are very cheap at the current price. If he fails, then further problems seem likely.

The post The Sirius Minerals share price? I’d buy this FTSE 250 dividend growth stock first appeared first on The Motley Fool UK.

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Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Superdry. 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.

Following an awful 2018 and a spate of profit warnings, the return of founder and major shareholder Julian Dunkerton as interim CEO coupled with a cheap valuation and relatively strong finances, led me to believe the retailer could be a great contrarian bet. 

Having said this, there’s certainly no point denying that anyone holding the stock must be willing to endure the potential for even more pain in the short term. 

“A year of reset”

Let’s not beat around the bush. Today’s full-year numbers were pretty awful.

Following a “poor performance in the second half across all channels,” total revenue for the year to 27 April was flat on the previous year at almost £872m, with gross margin falling 2.5% to 55.6%.

Underlying pre-tax profit came in at £41.9m — a near 57% reduction on the £97m achieved in the previous year as a result of extensive discounting at its stores.

On a statutory basis (taking into account non-cash onerous leases and impairment charges of almost £130m), a pre-tax loss of £85.4m was recorded, compared to £65.3m of profit the year before. 

To make matters worse, the company also elected to slash the final dividend by a little under 90%, from 21.3p to just 2.2p per share, leaving a total payout of 11.5p per share and a trailing yield of 2.7%.

And if that’s not bad enough, the next financial year looks like it will be equally tough for the business. Taking wobbly consumer sentiment and the need to “rectify” its product range into account, Superdry’s management now regards FY20 “as a year of reset.”

While new initiatives have yielded “small positive results,” revenue is expected to show a “slight decline” in the new financial year and particularly in the first six months as management continues to address the problems created by Superdry’s previous board. Increased spend in areas such as marketing are also likely to offset cost savings made elsewhere. 

If you ask me, a lot of this is already priced in. Based on the sharp recovery in Superdry’s share price after this morning’s initial sell-off, it would seem others agree.

Good value

Superdry’s stock was trading on a forecast price to earnings (P/E) ratio of just 9 before markets opened this morning. Although there’s likely to be a degree of adjustment to analyst expectations in response to the subdued outlook statement, I still think the shares offer value, particularly as the company’s finances continue to look in far better shape compared to other retailers (net cash position of £35.9m). 

In addition to this, it’s clearly far too early to judge whether Superdry’s new management team will be able to achieve its goal of stabilising the company and returning it to growth. As Dunkerton remarked this morning, current issues “will not be resolved overnight.“

As such, I’ve decided to retain my (small) position in Superdry with the expectation the share price is likely to remain under the cosh for the rest of 2019 (and probably most of 2020).

If and when Dunkerton’s turnaround plan shows any indication of working, however, I think those investing at these levels could be richly rewarded. 

The post Here’s why I’m sticking with this struggling growth stock appeared first on The Motley Fool UK.

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• Is this news a minor development for Greggs shares – or potentially a major one?
• 1 top ETF yielding 4.6% to consider for a £20,000 Stocks and Shares ISA

Paul Summers owns shares in Superdry. The Motley Fool UK has recommended Superdry. 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.

Sales soar (again)

Total revenue across all three of the company’s brands rose 39% to 254.3m in Q1.

Interestingly, PrettyLittleThing contributed 44% of this amount (£112.1m) — only slightly less than that achieved by Boohoo’s eponymous brand (£123.5m). Sales at the former jumped 42% compared to the latter’s 27%, demonstrating just how well the company is managing to grow previous acquisitions.

At 153%, the company’s third brand — Nasty Gal — achieved the biggest growth in revenue but still contributed only a small amount (£18.2m). 

Importantly, sales rose in all parts of the world in which Boohoo operates. The UK remains its biggest market, but sales in the Rest of Europe were up 72% to £38.2m and 64% to £51.3m in the USA. 

Taking this into account, I suspect Boohoo may end up beating its guidance on full-year revenue growth of somewhere between 25% and 30%. 

Over the reporting period, the AIM-listed company also purchased the brand and intellectual property assets of online womenswear retailer MissPap for an undisclosed amount. 

Despite this outlay, Boohoo’s finances continue to look rock solid with a net cash position of £194m by the end of May — 29% more than at the same point last year. 

Perhaps the only bit of ‘bad’ news was the slight reduction in gross margin from 55.2% to 55%, which may explain the share price reaction.

As always, however, Boohoo remains an expensive stock to buy, trading on an eye-popping 46 times earnings before today’s figures were announced.

As such, I feel it’s worth reminding Foolish readers that anything less than perfect delivery from new CEO John Lyttle and his team going forward could see the shares hammered.  

Profit warning woes

Whether the high expectations of Boohoo’s investors make it a risky buy or not, no one could argue that today’s numbers weren’t a world away from those released by Ted Baker (LSE: TED) yesterday, as covered by my Foolish colleague Roland Head. 

Like Roland, I do not believe that the departure of founder Ray Kelvin can be blamed for recent trading. I’d bet that most shoppers won’t have heard of him or will have quickly forgotten about the allegations made against him.

I’m also willing to accept bad weather for poor performance in the US, especially as this explanation was used by highly-regarded laser-guided equipment manufacturer Somero Enterprises when it warned on profits last week. 

For me, Ted has simply become another victim of ongoing consumer uncertainty and the move away from the high street — something online-only Boohoo doesn’t need to worry about.

While I continue to believe that the shares will recover, the scale of the fall in earnings has forced me to revise my opinion on how long this will take. Like fellow retailer Superdry, where I have a small position, we’re looking at more than just a few months.

In contrast to Superdry, however, Ted carries a fair bit of debt. The former also benefits from having a highly-motivated returning CEO (and huge shareholder) in the form of Julian Dunkerton, making me slightly more optimistic that it will bounce back first.

As such, Ted remains on my watchlist for now.

The post Revenue rockets at top growth stock Boohoo. Time to buy? appeared first on The Motley Fool UK.

More reading

• Want to build a high-yield share portfolio for dividend income? 3 things to watch
• Down 10% already this year, is there any hope for the Diageo share price?
• Up 28% in under a month, is Nvidia stock taking off again?
• Is this news a minor development for Greggs shares – or potentially a major one?
• 1 top ETF yielding 4.6% to consider for a £20,000 Stocks and Shares ISA

Paul Summers owns shares in Superdry and Somero Enterprises, Inc. The Motley Fool UK has recommended boohoo group, Somero Enterprises, Inc., Superdry, and Ted Baker. 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.

So long as you have the mentality of investing for decades rather than months, however, any short-term fragility simply provides an opportunity to pick up what could turn out to be bargains (there are no guarantees in investing, of course). 

One company I’ve thought undervalued for some time has been FTSE 100 broadcaster ITV (LSE: ITV). Indeed, I couldn’t stop myself from taking a position back in February. Since then, the price has dropped further. Since then, I’ve bought more. 

Part of my reasoning is simply down to the valuation. ITV now trades on just 8 times forecast earnings. For a company that still generates more than reasonable operating margins and roughly 40% better returns on the capital employed than the average across the index in which it’s a part, that’s surely too cheap?

The yield of 7.2% for the current year looks safe for now and the possibility of the company becoming a bid target grows stronger the longer it stays in doldrums. 

Yes, recent trading hasn’t been wonderful. Advertising revenue continues to fall due to the ongoing economic and political uncertainty and the lack of a major sporting competition like the World Cup this year.

A mere 1% rise in organic revenue at ITV Studios over Q1 was underwhelming. And the recent death of a participant on the popular Jeremy Kyle Show has also led investors to worry that other programmes, such as Love Island, might be scrapped too (two contestants have committed suicide since participating).

Nevertheless, I was encouraged to see the company’s highly regarded CEO, CFO, and chairman all making sizeable share purchases a couple of weeks ago. I like management with ‘skin in the game’ and these recent transactions suggest I’m not the only one that thinks the stock is inexpensive. At these levels, I’ll continue to accumulate. 

Down but not out

Another company I continue to believe will turn things around is retailer Superdry (LSE: SDRY). 

Despite being my top stock for May, I did caution readers at the start of the month that a poor trading update from the already-battered mid-cap should be expected.

Some awful numbers duly arrived (particularly relating to wholesale and e-commerce revenues), a profit warning was issued, the price fell… and I topped up my stake in the company.

Since then, the performance of the shares has been quite encouraging. Whether this can be wholly attributed to the appointment of interim CFO Nick Gresham, or more a sense founder Julian Dunkerton and chairman Peter Williams are getting things in order, is hard to say.

Regardless, a double-digit rise last Wednesday suggests any signs of progress are likely to be lapped up by the market.

But Superdry’s recovery, if it does happen, won’t take just a few months. Indeed, I believe it could easily be a couple of years before the market really likes the shares again. And that’s assuming we don’t enter a protracted bear market.

As someone with decades of investing still ahead of me, however, I’m willing to be patient.

There’s still a risk of things going from bad to worse, but the valuation of 9 times forecast earnings gives a sufficient margin of safety, I think. 

The post The market still hates this FTSE 100 dividend stock but I think it’s an absolute bargain appeared first on The Motley Fool UK.

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Paul Summers owns shares in ITV and Superdry. The Motley Fool UK has recommended ITV and Superdry. 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.

Each firm offers a yield of at least 5%, so patient shareholders should be rewarded with a generous income.

The boss is back

Shares in fashion brand Superdry (LSE: SDRY) have fallen by about 75% since January 2018.

Are there problems at Superdry? Yes. Is the business going to fail? I don’t think so.

Founder Julian Dunkerton is back in the driving seat and determined to return this brand to growth.

In a trading update last week, Mr Dunkerton warned that profits would be lower than expected for the year ended 28 April. But since taking charge on 2 April, he’s already made a number of changes that are expected to boost sales and improve profits margins.

Flagship stores are being restocked with a greater choice of items. Discounts and sales are being scaled back. And the range of choices available on the website has been expanded. These changes are expected to generate more full-price sales, boosting profits and helping to rejuvenate the brand.

There’s still a lot to do. But with the shares trading on 9 times forecast profits and offering a 5.5% dividend yield, I think the shares rate as a value buy at current levels.

Keeping it in the family

Leeds-based property firm Town Centre Securities (LSE: TOWN) owns a mix of retail, leisure and office property. It’s also the owner of the CitiPark car park business, which owns multi-storey car parks in a number of major towns and cities.

Town Centre’s shares have fallen by about 25% over the last year, and now trade at 40% discount to their net asset value of 361p per share. To some extent, I think this caution is justified.

But although some retail tenants have gone into administration, others are looking for new shops. Management has already found new tenants for six of the eight units that became vacant last year, with higher average rents than before.

The founding Ziff family still controls about 60% of Town’s shares. They’ve supported and grown the business since its foundation in 1959. Town Centre Securities survived the financial crisis without needing refinancing and I don’t see any reason why this impressive track record can’t continue. With the shares trading at a 40% discount to book value and offering a yield of 5.5%, I think now could be a good time to buy.

A growth business

A key growth area for retail landlords is leisure businesses such as 10-pin bowling operator Ten Entertainment Group (LSE: TEG). This business has impressed me since its flotation in 2017.

Adjusted pre-tax profit rose by 4% to £13.5m last year, while the dividend climbed 10% to 11p per share. Analysts expect earnings to rise by 25% to 20.9p per share this year, thanks to a mix of new openings and refurbishments.

The business carries very little debt and reported an impressive 15% operating profit margin for 2018. However, the shares pulled back during the second half of last year, perhaps due to concerns that Brexit could hit consumer spending.

I suspect this risk may be overstated. Trading on 11 times 2019 forecast earnings and offering a dividend yield of 5.4%, I think Ten Entertainment could be a good long-term growth buy for UK-focused investors.

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Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Superdry. 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.