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!!

N+1 Singer keeps holding Asos as model for growth
18 March 2014 14:11

While numbers were worse than expected, the trading update from Asos proved the robustness of its strategy, said broker N+1 Singer as it reiterated its 'hold' recommendation.

The trading update in the two-month period highlighted two key things, according to analyst Matthew McEachran.

Firstly, the continuing strong growth in some overseas regions and also the UK, albeit slightly softer than hoped, "confirms the strength of the model".

The second point is that as ASOS internationalises overseas currency fluctuations become increasingly relevant, with the recent appreciation of sterling hitting sales in several markets.

Forex cost Asos a large portion of its growth in its nascent Rest of World (RoW) segment, with the Australian dollar and Russian rouble costing it 12 per cent of growth as RoW sales grew by only 3% (vs +19%) compared to expectations of 24% growth.

Other geographies were both slightly better than market expectations with US retail sales up 41% and Europe up 57%.

News that warehousing investment has been accelerated in the UK and Germany means additional costs this year, on top of China start-up costs, especially in the first half of the current and next year.

"The investment will raise capacity to circa £2.5bn and therefore facilitate the next leg of growth."

In the medium term, the net effect of slower RoW revenue and warehousing dual-running and disruption suggested to the broker that full year profit before tax forecasts will reduce by circa £4m and deliver roughly £20m first-half profit, a near-20% year-on-year decline.

The analyst said the increased investment "highlights management remains bullish about future growth prospects" and pointed out that FX headwinds should moderate at some point in time.

OH

Date Company Name Broker Rec. Price Old target price New target price Notes

19 Mar 14 ASOS PLC Barclays Capital Overweight 5,658.50 - 6,000.00 Reiterates
19 Mar 14 ASOS PLC Citigroup Buy 5,658.50 8,000.00 7,000.00 Retains
19 Mar 14 ASOS PLC Nomura Neutral 5,658.50 6,000.00 6,000.00 Reiterates
19 Mar 14 ASOS PLC Deutsche Bank Hold 5,658.50 6,200.00 5,800.00 Reiterates
18 Mar 14 ASOS PLC Numis Buy 5,658.50 7,500.00 7,500.00 Reiterates

a few more for the mill .....

Liberum cuts target price to 2500p from 3000p; rating sell
HSBC cuts target price to 7,300p from 8,200p; rating overweight
SocGen cuts to sell from hold rating
Panmure cuts target price to 6051p from 6126p; rating hold
Cantor cuts price target to 6400p from 7200p; rating hold


it is noticeable that though Singer (above) make a number of bullish points, it is also tempered thus .....

full year profit before tax forecasts will reduce by circa £4m and deliver roughly £20m first-half profit, a near-20% year-on-year decline.

which i would hazard would be badly received by the market

Lets just face it, the brokers with their ratings don't have a clue..

fully agree, but to my mind, once sp recovers to >£62.00 (as suggested by PTH), shorting looks ever more interesting

Why 6200, its overvalued still and I'll short off a sell signal regardless of sp.

haven't really thought where that signal might be, though i understand from where PTH got his number
however, as this stock moves heftily almost without warning, you have to take your position a little ahead of time ..... would you concur?

Definitely not, if you take your position ahead of time then you most certainly risk being caught short.. You may lose some shorting ground confirming the signal but better that than a unrealised loss to shoulder.

an interesting and generally valid view, but you could not have predicted (i think) yesterday's dramatic tumble on the results
in the past, ASC has confounded everyone by beating forecasts, and thus sp has risen on the announcement

Lets face it the brokers do have a clue based on their valuation model what a companys true worth is.

These people live and die by thier analysis and face the axe if they get it seriously wrong.

I know this as I have been employed by both Shore Capital and Barclays Capital not as an analyst but on the resources side as a management accountant.

True they do get it wrong sometimes, but you tell me who doesnt.

Just look at the Chancellors budget forecasts in the past 3 years.!!!!!!!!

sticky - this isn't a political platform! .....

however, it seems to me that these so-called professional analysts (and economists) get it wrong an awful lot of the time ..... the analyses above, admittedly on a very oddball stock, have a wide variation on recommendation and value (target) ..... so which would you care to choose?

Your correct Cynic, I couldn't have predicted yesterdays result or how the market would react. I can however wait until after the event has unfolded and follow the signals being left...

Just to put you in the picture Cynic i dont take or answer direct questions from you anymore.

Like a lot of others on money am i have lost all respect i had in you.

How can anyone respect a person who just over looks everyones else's point of view but continually puts is own flawed point of view forward repeatedly.

The number of E-mails I get compaining about you.......ohhh dear.

Shortie - 19 Mar 2014 12:38 - 5078 of 5079

Your correct Cynic, I couldn't have predicted yesterdays result or how the market would react. I can however wait until after the event has unfolded and follow the signals being left...........ends

did not the Broker updates COME AFTER the results and company/analyst meeting (in many cases).!!!!!!!!!!!!!!!

Cynic is wrong.

Like a lot of others on money am i have lost all respect i had in you.
what a singularly childish and irrelevant comment
am i even meant to take offense let alone be upset?

why was i wrong?
i took a gamble and a small(ish) short position several weeks ago ..... i am more than happy that it eventually proved to be absolutely on the money, to make a rather silly pun!

like shortie, i still think this stock is hopelessly over-valued, even if the market continues to think otherwise - for now

goldfinger you're right, there is a number of brokers who understand market's ability to price the business and be able to stay in a step with the market.the competitiveness is forcing them to drop "true value" numbers with margin of safety because of seldomness of cheap.

well MrT, i'll refer you back to posts 5068 and 5069 and ask you the same question that i raised in 5077

it seems that sticky (GF) chooses not to choose

GF I was agreeing that I couldn't have predicted yesterdays fall, nothing more.

As much as I'd love to debate, ASC is going back on my watch list until, such a time sell signals arise again.