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 admit I know nuffink abaht yoof anymore.

Not sure the competition would be up to competing with ASOS. The nature of a growth market is typically lots of smaller firms being attracted into it by the supernormal profits of the market leaders. The problem with this is that many new entry firms have difficulty competing with what is already established. All the problems, such as logistics and stock, encountered by ASOS are part of the growth process whereby they seek to ameliorate these issues in order to increase revenues and lower costs. Rival entrants into this market would not only have to encounter and deal with these problems also, but would have to do so whilst competing against a slightly more mature company with invaluable market knowledge, economies of scale and an established consumer base.
Despite this, it is altogether healthy, and inevitable, that the success of ASOS encourages others to compete. Competition breeds innovation and we are thus likely to see improved products and wider niche's exploited by ASOS in trying to maintain their position as one of the top online retailers. It will be interesting to see the management's reaction.

Thanks, tau, for your thoughtful commentary.

SD

Thanks also, tau. Not sure anyway it is the same market image. Cheap designer clothes may not bring the up-market young ladies, whereas they are clearly attracted to the as seen on approach. Traffic remains healthy with March in line with October which was already into the Christmas season and way up on last year. Can't see the new warehouse as a major issue - the problem was operating from 4 warehouses in the Christmas season. These people know what they are doing so a new warehouse is all in a day's work. The next key event is the Q4 trading statement. We already have the forecast: volume will be way up because of the extended sale period but margins well down; hopefully margins will have recovered during March. Hopefully, too, there will be a more positive statement about trading in Q1.

My view is we will see a minimum pbt of 2M in 2005/6 or a pe of 17.5 on an sp of 50p. We should then see an analyst forecast, reflecting the improved margins from the new warehouse, of 4M in 2006/7. There would be good justification for the pe to move back to 35, implying an sp of 1. Not sure the shorters have closed their position although there doesn't appear to be new money; not much more to go for. I am opening a new CFD position for 20,000 shares.

Eric

Topped up and tucked a few more away this morning ..... lovely jubbly!

Makes sense, marketmaker. sp on the move. It will be interesting to see whether there is renewed shorting sales. Either they need to sell more or they need to buy back and the sp will rise to a more reasonable level. Suspect the tide has turned, triggered by my buy on Friday! lol!

Eric

saw that 20k - you did move the market ... i know that much!

lovely 150K and 100K buy trades at the close of play - supports view that the tide has turned and the price will be moving UP UP UP!!!

2 * 200K BUYS also reported - looking stonking for tomorrow....!

marketmaker

Do you actually make the market - otherwise how do you know they are buys? The spread at 16.04 was 52.5p to 54p and the trades were done at the midpoint 53.25. Shown on MoneyAM as sells but I suspect they were more likely to be buys; unlikely to get such a good price for a sell unless the MM are keen to get some stock in which would be positive anyway. EK still has his short position open, so he says, but no evidence in the trading pattern. Its worth watching though. May be an RNS this week. I'll build the position if SEO continues its ascent but I nearly got myself in trouble last week for failing to keep an adequate cash margin (CFDs).

Eric

Evening Eric

You are proving somewhat elusive!!

Still catching up! I think this coming week will prove somewhat decisive for ASC in the short term. The SP clearly has some support at 50p, but I am somewhat nervous about chart. Pretty inconclusive at the moment and it could still go either way. If the 50p level is breached, I think I may hedge and go short as I believe 40p will be the next stop.

Regards

PTH

hi PTH. Welcome home; home is where your heart is; home is where ASC is. Well, ASC has been a bit of a paionful journey that I could have done without. Sold my original holdings out before they came down thorugh the 70p support level but took longer to close the CFD positions and then re-opened them too soon aound 60p before being forced out by red paint across the board a month or so ago. Just rebuilding the position though not so aggressively because I rank ASC as merely a 3-bagger this year against the greater potential of SEO , CFP and NML. However, I feel a change of sentiment - a decent movement on relatively low volumes; the key difference is that there has not been shorting activity. It may be that there will be such activity during the week but I think that is a risky activity. There should be a trading statement this week or next. I believe it will be popsitive bvecause, whilst there is still the new warehouse to come next month, that is not a big deal and the indications are that trading volumes remain buoyant and the marging problems will be behind them. I am not 100% confident in that statement but I do beleive the upside to downside potential is at least 5:1 in the next few months and those are decent odds.

Eric

ASOS have not been offering their next-day delivery this month.

I wonder if they are moving warehouse early? Now the year end is over, it may be that they are moving out of the three extra smaller warehouses into the new large one first before the big push to take the main warehouse stock over in May. Just a thought. I would expect a trading update or early results soon after the move is completed and it is running smoothly.

Hard to predict the bottom for the share price, but I've no doubt that today's levels will seem like a bargain come results in 2007

Also, the number of items under the 'amazing offers' in the 'clothing' section (i.e. the clearance items) has reduced from 300 two weeks ago to just 90 today. Looks like they are finally beginning to clear the clearance...

Helpful posts, wjordan. I suspect the time comes when it is best to stop promoting sale items because of the law of diminishing returns. How do you rate the newer offerings?

Last year there was a trading statement on 14th April which gave the management accounts for the year and reported on current trading. That suggests a staement within the next week. Your warehouse view sounds likely and I would hope for something encouraging about prospects. Traffic volumes have held up well and I think are not far short of double a year ago. That ties up with internet trading figures generally. If there is good news then the sp could move quite quickly as short positions are closed - the Evil team must have built up a fair old volume and the MMs are unlikely to allow them buy back time at this sort of price. Could be interesting!

Eric

Indeed.

At the moment I just watch and wait. If we do see the price go down to 40p I'll be buying a lot more.

Hi All

News has Fidelity International holding 4% ASOS

Ruthie

Fidelity increasing their stake by 1,000,000 shares

Nearly as many as Eric now! Bet they were silly though and bought the shares full cash instead of using CFD's! LOL :)
SD

Bad dog

Fidelity have a reputation to maintain ie they don't tend to do silly things is my point. ;)

Ruthie

I closed my short, and am now looking for the upturn - not quite yet though, look for mid-May when I expect to be going back into ASC