[ad_1]
Image source: Getty Images
As January comes to an end, an array of FTSE The retail company has reported its quarterly results. There are some winners and losers from the group. I have chosen two UK shares that I think are worth buying, and the other two I will order in February.
1. Mark and Spencer
As the best performing FTSE listed wholesaler in the last quarter, Marks and Spencer (LSE:MKS) went on my shopping list. The hybrid retailer had an excellent quarter in which it posted record sales of food and clothing, beating the giants Tesco and Sainsbury’s. This led to market share expansion on both sides. And with plans to accelerate its store rotation plan, the FTSE 250 The group has a lot of potential to grow further.
In addition, M&S is slowly improving its balance sheet status and paying down debt. Couple that with a low valuation multiple, and I’ll be looking to buy more shares in the coming days.
| Metric | Marks and Spencer | Industry average |
|---|---|---|
| Price-to-earnings (P/E) ratio. | 9.4 | 14.2 |
| Price-to-sales (P/S) ratio. | 0.3 | 0.3 |
| Price-to-book (P/B) ratio. | 0.9 | 1.4 |
| Price-to-earnings growth (PEG) ratio | 0.1 | 0.1 |
2. Dunel
The doom and gloom surrounding home improvement stocks has faded over the past few months, as the numbers have proven their resilience. Dunelm (LSE:DNLM) proved its doubters wrong again with another strong trading update. Therefore, it is no surprise that the share price has risen 60% from the bottom in September.
The company reported a decline in expected margins, but it all came to nothing when other, more meaningful metrics gave better numbers. Last quarter sales were 18% higher and up 48% from pre-pandemic levels. Additionally, the board now expects full-year profit before tax to beat analyst consensus, with a range of £131m to £186m.
3. Dr. Martin
On the flip side, Dr. Martin (LSE:DOCS) get the boot from me. It’s not hard to see why, as the stock is down 30% this year.
The latest update from the shoemaker is full of bad news. Supply chain issues related to bottlenecks at the new Los Angeles distribution center were the main culprits. Consequently, the company now expects weak US sales for the year.
As a result, it now predicts that profits will drop significantly. Wholesale revenue is likely to be somewhere between £15m and £25m, while EBITDA will lose an estimated £16m to £25m, including £8m to £11m of supply chain costs.
4. Naked wine
I avoided it too Naked wine (LSE: WINE). Pandemic favorites have fallen out of favor since Covid restrictions were lifted, prompting management to reverse the ‘growth at all costs’ model. This translates into sweet updates recently. The company reported somewhat optimistic figures from the last quarter, and even updated its forecast for better profits.
However, I’m not sure about the long-term potential. There is certainly hope for retailers to age like fine wine. However, I don’t see the share price rising at a rate that warrants the opportunity cost of investing in other UK stocks with upside potential.
[ad_2]
Source link