FNArena’s Weekly Insights – March 01 2022

In this week’s Weekly Insights:

-Too Many Distractions From Corporate Results
-All-Weather Model Portfolio

By Rudi Filapek-Vandyck, Editor FNArena

Too Many Distractions From Corporate Results

Consumer-related companies and retailers have been at the centre of the February reporting season in Australia; mostly not in a favourable manner -at least not in share price performance terms.

This turned out the ideal background for cheap-bling retailer Lovisa Holdings ((LOV)) to show not all retailers are made of the same ilk, and not all are struggling to contain costs, retain staff and re-connect with customers.

Lovisa’s 59% jump in earnings throughout the six months ending in December simply pulverised analysts’ forecasts with stockbroker Morgans stating the performance was “nothing short of remarkable”. This, the broker continued in its response the following day, is potentially one of the biggest success stories in Australian retail.

At least that is the prospect. Lovisa obviously has found and developed a formula that is appealing to younger women who don’t want, or cannot afford, expensive Bulgari or Harry Winston, and who keep revisiting its stores. Retailers like Lovisa live and die by rolling out ever more stores, and this implies adding new geographies.

Are India and China on management’s radar? Market speculation says yes. The potential growth path ahead if Lovisa were to successfully enter those mega-markets… it’s almost beyond imagination. It would definitely vindicate Morgans’ Grand enthusiasm. Premier Investments’ Smiggle to the square root, or something similar.

In the short term, throughout the fog of war………

Click to read the Full Report