06 Jun 2018
Downgrades can be a double-edged sword; they can ravage your existing positions, but they can provide attractive entry points for stocks on the watchlist. The A2 Milk Company fell nearly 30% following its earnings update, but it’s still up ~200% over the last year; is now the time to jump on the bandwagon? JB Hi-Fi has defied expectations of an e-commerce apocalypse, but can its PE recover following its troubles with the Good Guys acquisition? For Smart Parking, the fall has been severe, down 50% on the back of problems in its UK business, so is this a buying opportunity? Dean Fergie from Cyan Investment Management and Ben Clark from TMS Capital give their view on each of these stocks, as well as sharing one of their own, in this week’s Buy Hold Sell.
Key points:
A2 Milk’s profitability is being masked by their aggressive expansions plans, but it might be ‘priced for perfection’.
JB Hi-Fi has a great brand and a low cost operation model; can it withstand the onslaught of online competition?
Smart Parking recent lost two key managers from its UK business, where 85% of their revenues come from. Can it turn around its fortunes?
Our two panelists each bring along a high-flying stock that’s taken a recent tumble.