Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Burberry’s China crisis…and why the shares are a buy

By Chris Bailey of Financial Orbit

15 October 2015 05:47

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Six weeks ago when I wrote an article for ShareProphets’ e-book The Magnificent Seven I wrote about a business with… ‘…real heritage and was founded a mere 159 years ago in 1856. It is a large business and nestles happily in the FTSE-100 supported by brands that have a growing global appeal with net cash on its balance sheet, good free cash flow generation and a progressive dividend yield of currently just below 3%. The company used to just sell its wares from an expensive shop location but today interacts with its fans and followers digitally to such an extent that a couple of years ago its previous CEO was poached by a small technology company you may have heard of called Apple to assist with their digital brand positioning’ Well more fool me. Burberry (BRBY) may have risen pleasantly in the month or so immediately after the e-book publication but today’s shocker statement and share price moves puts me at a loss today versus my tip level.

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Comments

Colin

15 October 2015, 10:22

Hmmm not so sure. I expect a rebound in the short-term but this is the mother of all cyclical stocks – data points to coming bear markets which means this stock will be weak medium-long term. Reckon a fair few city boys are short BRBY on spread trades too.