ASOS have dropped quite significantly in the past week for no particular reason and I view this as the perfect opportunity to invest as I can see them bouncing right back up to the 5.50p mark in the next 2-3 weeks. STRONG BUY!!

I bought at 10.13 bunny and topped up recently at 69 - it has been a good one
(good from a CGT point of view too being AIM):-)

Agree about potential market for slightly older age group............. market
your idea to them :-))

stockbunny

I suspect that would be a good target market, but perhaps it would need a different website (prefer that age range myself!). They are also targetting men but your idea makes sense. First got in at 23p but had lost the first 4-bagger and kicking myself for missing the Shares recommendations. The other upside which I omitted is the possibility of a takeover at some stage. I expect it would be resisted at this stage but as the company matures, and the management have had a surfeit of success, the time will surely come. This Christmas has shown that the internet (TV) has arrived for fashion, as well as books and Xmas pressies in general, so Boards of the High Street leaders must be both worried and wondering. What price - not less than 2.50!

Eric

Certainly looks good for the future :>)

Good to see a happy bunny :>)

FIRST ASOS CHALLENGE PORTFOLIO

Final regular report after the 15 weeks of the Portfolio. legend (BNH)wins by a very short head from bosley (SEO). Team are a respectable third with ASC - holding fire for second challenge. The rest needn't to have turned up at the races. Trounced by that good stayer - the small.cap. index. So lesson learnt and on to the second challenge (separate thread). Lots of action left in ASC, I believe, so need the thread to itself. Will keep an eye on this portfolio and report as appropriate. I understand Sandrew is providing one of her fab. dinners in Cornwall for the winner and cornish tea for the runner up!

company_________ EPC pp(p) issue-m shares price val. cap-m gain % gain-wk

Broker Network H BNH 77.50 15.065_ 6450__ 123.5 7966 18.61 59.35_ -3.14
Stanelco________ SEO 4.50_ 782.225 111000 7.125 7909 55.73 58.33_ 11.68
ASOS____________ ASC 56.00 67.97__ 8900__ 78___ 6942 53.02 39.29_ -1.89
Sterling Energy_ SEY 17.25 822.712 29000_ 16.75 4858 137.8 -2.90_ 9.84
Civilian Content CCN 16.25 41.883_ 30700_ 14.5_ 4452 6.07_ -10.77 0.00
Marchpole Hold._ MPH 33.75 120.445 14800_ 27.5_ 4070 33.12 -18.52 -1.79
Yoomedia________ YOO 22.00 499.9__ 22700_ 17.75 4029 88.73 -19.32 2.90
Cybit Holdings__ CYH 91.00 19.779_ 5500__ 69___ 3795 13.65 -24.18 5.34
Petroceltic Intl PCI 15.00 484.975 33300_ 10.5_ 3497 50.92 -30.00 25.30
Petrel Resources PET 124.5 58.625_ 4000__ 52.5_ 2100 30.78 -57.83 -5.83
CFA Capital Gp._ CFP 0.70_ 619.0__ 714000 0.26_ 1856 1.61_ -62.86 -7.14

totals______________________________________________ 51473 -6.41_ 3.08
small cap index_____ 2,596.50______________________ 2846.9 +9.64

The point that strikes me with this week's movements is that there is a lot of life in (most of) these shares. Good recoveries in PCI and SEY, probably linked to the oil price. SEO is on a good uptrend and has broken through its resistance level decisively. CYH stirring. Good news could arrive anytime for PET. CCN, MPH and YOO still in winter hibernation. CFP has had to start again with a new Board. Several worth holding or keeping an eye on. Finally, better luck to us all next time (except legend but including bosley as I'm backing the same horse!)

Eric

I know this is the asos bb and only good things are wanted to be said, but if you are considering buying more asc then ask yourself this question.. why buy asc when they are forecast to make 1.5m and they are valued at 54m on a p/e of 100 when you could buy

Broker Network (BNH) on a p/e of 10 (valued at 19.5m) and will easily make 1.5m profit in Julys results, has 3m cash in the bank. I topped up the other week. In comparison, BNH is 2-3 times undervalued than asc when profits are the same...

If anyone comes back and says brand name or goodwill, yes I will accept that it does exist and because of its intangiability it is impossible to quantify, but how much is goodwill worth if you split a company up??

Yes asc has done exceptionally well - much better than I personally thought - and hats off to those who have done well from it, but isn't it time to move on???

Did you get my request for the competition eric - 20k of Tandem group (TND)How many are in for the comp then??

legend

Good post. Re the challenge I have your buy and will be putting together the portfolio on Sunday evening. With your burgeoning reputation I will give priority to looking at TND! 14 in at the moment and 2 or 3 more expected.

It seems to me that the most difficult factor to take into account when investing is the level of confidence. You have pe, peg, price to sales, etc. but how confident are we that the forecast will stack up? Take the FTSE100; which companies can I see progressing at their present level in 5 years time? My answer: Tesco and HSBC. Why the confidence? Track record; strength in a stable market; proven management; a steady hand which exploits opportunites and avoids mistakes. There you have a 20 year track record. Can we ask the same over 2 to 3 years with an AIM company? ASC, to my mind, passes the test. It may be that BNH also does - I think that's quite likely from what I've seen. Possibly SEO? Another which is small.cap. is AZM. Others? So I'm better with 50% annual growth with the confidence factor than a number of less stable companies with seemingly better growth ratios.

That's my attempt at a general answer to a good question. Specifically re BNH and ASC? I should return to BNH again before trying to answer substantively. My intuitive answer is actually longer term. Where will BNH be in 5 years time? I have confidence in my answer for ASC which I won't give unless challenged by your emulating response for BNH!

Eric

I really think BNH will be taken over if the price stays so low... I have every confidence that it will be around in a few years time eric...It has only just started... it is now it will start making the real money - desperate insurance brokers struggling to cope with compliance from the ever demanding FSA... got to be a winner!!!

Totally agree that the longer a company has been around the more you would trust it. Broker Network has been in operation since 1994 so I personally have every confidence it will continue. Has plenty of cash and assets and an excellent business model. They are wisely investing their cash raised on floatation and take over small insurance brokers on average 1.13 x their earnings... you tell me a listed company that you could take over at 1.13 x their earnings??!! thats 87% profit!!!

It was tipped at the 1.265 level in shares mag, I wouldn't have thought you could go wrong at its current level. It won't be long before there is institutional demand around for this stock.

legend

Thanks. I will revisit it. Essentially, you agree with the confidence criterion. Its arbitrary really whether share A is better than share B. If only a handful pass the confidence criterion then you can invest in each of them. I have been overweight in ASC and am gradually scaling down. The switch to SEO has worked very well: super to get the timing right; first fruits of the 2005 version of 'Eric the Investor'. Good luck in the comp.

Eric

Cheers Eric.. I thought the tactic for this comp was to buy one share that you think will exceed and preferably different from the others.

You will have your work cut out with all these entrants.. Good luck yourself!!

I will post my research about TND soon and start a new bb.

Thanks, legend. Are you happy going with one share? - you can change until 8pm Sunday. However, may well be winning tactics.

Eric

Absolutely dead on Eric, never been more confident... Good fundamentals. Cash in the bank, low p/e (6falling to 3.5 on forecast for next year), has past
losses so they pay no tax on profits, etc. Not one I had come across before but owns some good brands and forecast to improve performance considerably.

Articles galore on ASOS in the Telegragh today, including a profile on Nick Robertson, all positive stuff!

Good positive write-up in Express, as well. Mind, I only read it for the alphapuzzle! No mention in Hemscott letter so I dropped the line aying they need an update next week on impact of internet and DTV. Eric

Good write up in the independant on sat, focusing on acs and growing internet sales.

Good write up in the Saturday FT as well. All this publicity must be good for the share price!

My prediction is that, whilst ASC may not win its own second challenge, it will be well up in the top quartile. I'm interested in the cap. which is in the region of 50M. I wonder if there are not a number of institutions which only become interested at that level. 2005 , I suspect, will also be the year in which internet and DTV trading, becomes recognised in the same breath as High Street. A point for new site visitors is that there is plenty of action to come. Another prediction: 100K cap. by the year end! I will be doing some switching out at appropriate prices (given I have spotten an n-bagger!) but will retain as overweight.

Eric

Reply from Hemscott, directing my attention to piece in their daily news at www.hemscott.com clicking on news. Additional insights:

"Some of the clothing retailers on the high street have had a dismal Christmas this year and, looking at ASOS's results today, it seems a lot of shoppers have stayed at home and shopped on the internet instead."
"...one report said recently that sales of clothing on-line in the UK have risen five-fold in the past three years. ASOS appears to be one of the major beneficiaries."
"Further out the company plans to move to a new warehouse in June which it says will lead to further operational efficiencies."
"The balance sheet looks strong with a cash position of 1.7m, up from 1.3m in November, and no long-term debt."
"The concensus among brokers is for profits of 1.5m this year, rising to 2.9m next year. There's no dividend and the forward PER of 27 looks high, but with earnings forecast to treble over the next two years the rating looks quite reasonable. Hold"

Prospective PE for 2004/5 is 36; 27 has been forecast for 2005/6 but this would correspond to profits of only 2m; 2.9m would be more like 20. In two years time, given a PE of 12 at current price and another forecast of trebling earnings, actual PE more likely to be 30, implying an sp of 2 in two years time. ACCUMULATE, not just HOLD, please. Note that every bit of news about ASOS is GOOD NEWS.

Eric

I follow with interest all the opinions of many more experienced than myself, and I am learning a great deal. But, can someone explain why this star performer is now "falling out of bed". Should I be worried by another fall in the sp to 72?

toad44: It is difficult to answer your question without some knowledge of your own investment objectives. From a charting perspective if the SP breaks 70p on an EOD basis, that would be a clear Sell signal to me and you would look to buy back once it bounces from a support level (70p?). At the moment all my charting indicators...the ones I use, suggest it is a Sell. However if you bought the share at a much lower price than you find it today then you may want to hold. From a fundamental perspective, ASOS has a high PE ratio going forward, so the market expects it to continue to deliver stunning results, but against that background there is a worry that retail spending may fall back a tad and that might have an impact on future results and hence the SP. There is also the planned move to a new wharehouse, now when it is up and running that will be a SP positive, but until that time there is a lot that can go wrong, and many retail analysts have heard all about moves to new wharehouses to increase efficiency etc, only to read company statements about problems with the move impacting this years results...

I anticipate that Shares Magazine will feature ASOS in tomorrows copy so that may boost the SP...we will see.

I hope that is helpful to you...it is only my view and you ahould of course reach your own judgement about the share. Indeed I anticipate a flood of responses putting forward alternate views!

JGT