This popular UK stock is up 31% in a month! Should I join the party?

Cross over FTSE 100no stock has done better in the past month than JD Sports Fashion (LSE:JD). Up 31% during this period, but down from 19% last year, boosted by a strong Q4 and improved risk sentiment. But with it still far from the 2022 high, there may be an increase in this UK stock in 2023.

Reasons to be positive

Last Wednesday, the business released its statement for the Q4 and Christmas trading period. In the six weeks to the end of the year, sales increased by more than 20% over the same period in 2021. In the 22 weeks to the end of the year, revenue increased by more than 10%.

This is an impressive performance for two main reasons. Revenues in 2021 have set a high water mark, as spending is at the end of the year after being locked. Furthermore, analysts have been talking about the gloomy UK economy and the impact of the cost of living crisis for months. In line with that, many have expected revenue for JD Sports to fall as people cut back on spending.

Growth in North America was also commented on. 134 stores may be only a small part of the 3,300 stores worldwide, but there is a growing number and the company is investing this year. This initiative should help businesses to accelerate to the next level. You should also help JD Sports become less dependent on the UK business.

Uncertain UK stocks are in vogue

Reading the above, it’s no surprise that the stock has jumped recently. But despite being a popular stock with retail investors over the years, it hasn’t always performed well.

After reaching levels above 200p back in Q3 2021, the share price has halved its value in 2022. It was trading below 100p last October. Interim profits fell, amid concerns over supply chain issues and high inflation. It also had to contend with negative press surrounding the departure of chief executive Peter Cowgill in May, along with CFO Neil Greenhalgh announcing his departure in October.

I think the main risk for this year is the stability of the senior management team. These leaders set the tone for the company’s performance and strategy. As people come and go, this vision can disappear quickly.

Get ready to buy

In the short term, I think the hype around this growth stock is high. I want to be careful not to suffer at the hands of speculative traders who may sell in the coming week for a profit. This can cause the price to drop. Therefore, JD Sports is a stock I would like to buy, but I will wait for a slight pullback in the share price before investing.