Boohoo

Monday, Dec 18 2017 by
8

What do people think of Boohoo now?

The PE is trading at 50.2, which is lower than ASOS of PE of 80 and similar to Net a porter at 50.

Both are aggressive expanding into international markets which would contribute to the lower operating margins. Also with exchange easing on the UK market we should see some of the pressures reduce marginally.

For me I am looking to reenter at the current price. I currently do not own any Boohoo shares.




Filed Under: Fashion,

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Boohoo Group PLC, formerly boohoo.com plc, is an online fashion retail group. The Company is based in the United Kingdom and has a strong presence in the United Kingdom, the United States, Europe and Australia, selling products to almost every country in the world. The Company owns the boohoo, boohooMAN, PrettyLittleThing and Nasty Gal brands. These brands design, source, market and sell clothing, shoes, accessories and beauty products targeted at 16-30 year old consumers in the United Kingdom and internationally. more »

LSE Price
216.9p
Change
-1.7%
Mkt Cap (£m)
2,493
P/E (fwd)
47.0
Yield (fwd)
n/a



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10 Posts on this Thread show/hide all

Trigger14 18th Dec '17 1 of 10
1

I like Boohoo and think the price is looking pretty reasonable now. I really don’t understand why ASOS is higher rated. I heard (probably on ADVFN) that some hedge fund started a short position on Boohoo on the basis that its margins were declining and it would soon need to start sourcing from other third parties to continue growth, which would make its margins decline further - or something like that. It sounded like a pretty weak short thesis anyhow but might explain why the recent drop is being protracted. Personally I’d wait for the price to bottom out before buying in as I think this gives a better reward to risk and I have many other fish to fry but I think it wouldn’t be crazy to buy in now.

Blog: Quality Share Surfer
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matylda 18th Dec '17 2 of 10
4

FYI - Just checked Short Interest Tracker and <1% is being shorted according to their figures.

Trigger14 - Do please advise when price has bottomed, much appreciated.

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cheehowan 18th Dec '17 3 of 10

Purple bricks and Boohoo have been going through the same slump. Purplebricks look like has bottomed out, I think Boohoo may be close. A couple of non exec directors have recently bought more shares although small volume.

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WhaleHQ 18th Dec '17 4 of 10
1

The two major reasons I hold: I’m reasonably confident that boohoo’s sales will grow into it’s expanding capacity over the next few years and that the CEO (s) will act in the best interests of shareholders due to the incentive of large personal and family shareholdings.

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Carey Blunt 19th Dec '17 5 of 10
1

I thought it might have got down as low as 160p but actually I now think this is as low as it’s going to get. We all know it’s impossible to call the bottom or the top of any share or market but it’s now at a point I would buy more to add the holding I already have.

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dfs12 19th Dec '17 6 of 10
7

I hold too and historically I'm a value investor - so holding Boohoo.Com (LON:BOO) would seem an odd choice. On measures like P/E Boohoo.Com (LON:BOO) still looks quite pricey, even after a good drop like we've had in the last few months.

However, on my new favoured measure - Price to sales - it doesn't look so expensive. Price to sales was highlighted as the single best predictor of share price outperformance in "What Works on Wall Street" by James O'Shaughnessy. He did thorough back testing using a rule of buying shares where the price to sales is less than 1.5. Over time this provided excellent results. And conversely buying shares with a massive price to sales ratio did very badly indeed (typically jam tomorrow companies).

Boohoo.Com (LON:BOO) has good revenue compared to its shareprice and when you consider it also makes a good margin on this turnover it looks far from expensive. Price to sales is currently 4.72 and net margin is 6.3%. To put this in context with other companies with similar margins... GlobalData (LON:DATA) has a price to sales of 5.1 and net margin of 3.2%, AVEVA (LON:AVV) price to sales 7.6 margin 9.4%, IQE (LON:IQE) price to sales 7.7 and margin 11.9%. And there are lots of companies that have a much higher price to sales ratio - these are a mix of typical jam tomorrow companies and solid companies that have very high margins.

So although a price to sales ratio of around 5 doesn't pick out Boohoo.Com (LON:BOO) as a cheap share it is clearly not highlighting it as considerably overvalued. To be able to buy Boohoo.Com (LON:BOO) and its potential (which has largely been demonstrated over the last year or so) at a fair price seems good to me.

Probably not long before we get a Christmas trading update so we'll soon see.

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pippasfan 8th Jan 7 of 10
2

The thing I like about Boohoo, is they appeal to young fashion buyers. Watch mtv on the telly, every advert break is full of boohoo. Talk to any teenager and they will tell you, they shop for clothes mainly online, and boohoo is often the first port of call. All the billboards around my city, are full of boohoo. To me, they look like a value buy

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Laughton 28th Feb 8 of 10
4

Not really sure if this is the right place to post but thought it would be of interest to those holding or thinking about buying Boohoo.Com (LON:BOO) -

https://www.thestar.co.uk/business/1-200-jobs-the-prize-as-internet-fashion-brand-boohoo-targets-giant-sheffield-warehouse-1-9038855

Given that they're in the middle of fitting out a huge automated wharehouse in Burnley - how much stuff must they be selling for them to be considering buying even more space?

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mpjubb 22nd Mar 9 of 10

Looking at the chart it looks like BooHoo has had 8 distribution days since the beginning of Feb and no follow through days. Looking at the volume it looks like someone big is potentially exiting.

Shorts are 1.7% and increasing.

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dfs12 25th Apr 10 of 10
2

In reply to post #256358

Results out this morning. Sales of £579m predicted to rise 35-40% in the next year. Taking 35% that makes £781m sales. Market cap is £1.7b. That puts Boohoo.Com (LON:BOO) on a forward price to sales of just over 2. Quite simply way too low for this type of business. Downside potential from here looks very limited indeed.

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