British Shares are Cheap

Says Tom Stevenson in The Telegraph… Dark economists forbode the future but there are reasons to carry on as value companies are at a bargain and most stock picks this week are a mix of BUY, SELL and EQUAL WEIGHT this week at Stockomendation.

1. AVOID Joules

Top stock pick this week was Avoid Joules Group by Steve Moore in ShareProphets with a stock pick performance of a startling 14%.

The quality retailer was in the news this week as being ‘on the brink’ after low trading revenues impacted working capital. Joules it’s now considering an equity raise and other schemes. Shares slumped almost 25% in one day on the announcement.

2022 has not been easy for Joules with rumours of insolvency planning back in September as part of its turnaround plan.

Tom Joule started the retailer in 1989 in Leicestershire after selling hats and wellies at market stalls and buying 80% of his father’s shop. A favourite of Prince William and Princess Kate, hard market conditions are impacting the quality retailer with cost cutting on the cards, possibly closing less profitable shopfront stores.

2. SELL Cineworld

Second interesting top stock pick this week was a SELL Cineworld Group by Tom Winnifrith in ShareProphets with a stock pick performance of 14%.

Cinema stocks fell off the table during COVID and for all intents and purposes it seems people have forgotten all about trips to the cinema since enduring three years of house arrest.

The embattled movie venue chain saga has been running since then with $1 billion in debt owed to lenders due to debt incurred by the crisis. It declared bankruptcy and will exit Chapter 11 in Q1 2023.

An update was due on Wednesday the 9th but didn’t eventuate and shares slumped by 13%.

Cineworld is the world’s second largest movie chain – what does the future hold for this kind of entertainment? With the rise of Netflix and home watching, a trip to the flicks could well be a thing of the past.

3. OUTPERFORM Next

Third top interesting stock pick this week was a moderate buy Next by RBC Capital with a stock pick performance of 6%.

First buy recommendation this week for the 158-year-old fast fashion retailer headquartered in where else but Leicestershire. Stark comparison to another Leicestershire retailer above.

But the big news that moved the dial this week is the announcement that Next has bought online furniture retailer made.com for a cut-price deal after the retailer went bust with 400 workers out of a job.

With a depressingly fast and direct plummet from the opening price of £200 in 2021 to the closing price of just 50p now, Next has certainly snapped up a bargain with the purchase of the name and IP for just £3.4m. Value at opening was £775m, proof of how much can go wrong when it does after listing. With £1.8m in web traffic heading to that domain, we think Next snapped up a bargain!

Made.com’s fortunes are a seemingly an opposite trajectory to Next having listed in 1998 at £252 and now at a whopping £2,354.

Next is getting a reputation as the retail knight in shining armour after rescuing Victoria’s Secret 2 years ago. To any shoppers it was the beginning of the end of why anyone loved the brand with Next allegedly taking all the good & leaving the rest!

Next is very much price focused whereas Joules is quality focused, and we can see what consumers are valuing at the moment – it’s very much a bargain basement time in retail and we can see from the comparison stock above.

Funnily enough the 2 retailers have talked in the past about investment.

With this share price rise and a track record of wins no wonder RBC places the moderate BUY pick on the retail stock notwithstanding the times ahead.

Value stocks abound and dividends are high: it’s gold for the price of silver now – who will pick the Next Big Thing? Who knows but with Stockomendation new Fund Manager Short Positions feature you can join the best of the bears and find out what they’re selling.

See Short Positions Now!

Disclaimer: The contents of this article should not be considered financial advice. Pricing data correct as at 10th November 2022..