Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.
Poundland (PLND) had its share price hammered by around 25% when it published its latest interim results. But I think this drop is well overdone and represents a buying opportunity for this FTSE250 listed company, especially given its expansion plans and targets for growth.
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Comments
rob
Gary, i dont get the future sales model, I dont see where the growth will come from except by acquisition or opening new stores, ok in the shortish term but how are they going to cope with future inflationary pressures on items they can only ever sell for £1 ?
I wonder could we see a name change to £2land one day
Gary Newman
Rob,
A lot will come down to the performance over the Xmas period, as they really need that to be good. Plus the levels of growth they continue to achieve in Spain and Ireland over the next few years. A lot of the supermarkets are struggling at the moment, and although some of the figures here may not look attractive (certainly if you simply used something like the P/E ratio – then you could say the same about Tesco etc) I think the share price drop has reflected that to a large extent – its now getting towards half of the market cap it floated at.
It is one that I’d take a longer term view on but be prepared to cut the position if forthcoming updates don’t point to things starting to move in the right direction. From the current SP i think it offers reasonable risk/reward.