FTSE 100 stock JD Sports Fashion (LSE:JD) is a retail staple in UK high streets. The company has a global presence with 3,400 stores worldwide. In recent years, acquisitions and new store openings in Europe, Asia and the United States have further strengthened the international footprint of JD Sports.

In February, CEO Régis Schultz set out a growth strategy for the next five years that focuses on continued expansion. Schultz took the helm at JD Sports in September 2022 following the departure of former CEO Peter Cowgill who left under a cloud in May 2022 following price-fixing allegations, after 18 years with JD Sports.

New direction

Laying out the new direction, Schultz stated: “Today marks a new distinct chapter in the growth story of JD as we set our plans to become the leading global sports-fashion powerhouse”.

Referring to long-term market dynamics, Schultz outlined a predicted capital expenditure of £500m to £600m. JD Sports expects to allocate 50% to 60% of its spend to expansion in underpenetrated markets, and to open 250 to 350 stores over the next five years. Double-digit revenue growth and double-digit market share in key regions is a key target.

Bucking the trend

Whilst the JD Sports strategy may sound bold, the company has been bucking the trend in terms of outperforming rivals. At ASOS, profits dropped 89% during the 2021-2022 period to £22m. That’s down from £193.6m the previous year when Covid-19 lockdowns boosted online sales.

JD Sports, however, reported an increase in profits for the 2012-2022 period. Profit before tax came in at £364m, up from £41.5m the previous year. For the year ending 3 February 2024, profits are expected to exceed £1bn after strong Christmas trading.

Group Operations Director at JD Sports, Sherilyn Patterson, says the company’s target demographic is 16- to 24-year-olds. Robust sales are attributed to customers having “strong buying power” and more expendable income with most still living at home where they are less exposed to the cost-of-living crisis.

There is a note of caution, however, with such bold expansion plans that are reliant on international expansion hot on the heels of a global pandemic. The past three years have shown that situations can change rapidly.

JD Sports has a strong management team with much retail experience. Yet could JD miss the steady guidance of the previous CEO who was fundamental to the success of the company? It would appear, however, JD Sports is in safe hands, with its new CEO having had significant success at the French retailers Darty and Monoprix, driving growth and sustainability initiatives. Sustainability is an area where JD Sports performs well and will continue to be scrutinised by investors.

Overall, JD Sports is a well-established and successful sportswear retailer with a global presence and a strong financial performance that seems set to continue. I am strongly considering adding JD Sports to my portfolio as a long-term investment.

The post Why this retailer is looking like a cheap FTSE 100 stock right now appeared first on The Twelfth Magpie.

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Gilly West does not have a position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

After a tough start to the year, analysts at UBS and Bank of America changed their recommendation to ‘buy’ from ‘neutral’ in March with a target price of £5.60 and £5.80 respectively. The upgrade from analysts sparked a rise in the Glencore (LSE:GLEN) share price that had been dropping since late January. Could a possible reversal in fortunes be on the cards for investors?

Glencore is a Swiss miner and commodity trader and one of the world’s largest producers of copper. The metal is expected to rise in price over the next 12 months.

Increasing demand in China as the economy recovers and a tight supply means the price of copper could reach record highs. UBS stated “We remain cautious on the mining sector” while noting that data from China was encouraging in relation to Glencore.

Increasing demand

Copper is a key metal in terms of the transition to net-zero, given its use in renewable energy technologies and electric vehicles. Demand is predicted to double by 2035 according to a report from S&P Global. Glencore stated: “We expect demand to grow exponentially for renewable energy technologies, and the metals and minerals required to build them”.

In February. Glencore announced its full year earnings as $34bn, a rise of 60%. This was largely as a result of high commodity prices.

It is not all plain sailing for Glencore, however, given its exposure to thermal coal as one of Australia’s largest coal producers.

Coal is highly profitable for Glencore. Yet the company has pledged to investors that it will responsibly run down its mines by 2040. Glencore states that it will be a net-zero emissions company by 2050. There will be sustained pressure from campaigners and investors to improve on environmental targets.

Additionally, the price of thermal coal has weakened after surging in 2022. This is a consequence of the war in Ukraine, of course, and the ongoing energy crisis. The company noted that 2023 profits would be depressed because of lower coal prices.

Glencore’s proposed $23bn merger with Teck Resources on 3 April has also been rebuffed. An unsolicited hostile bid proposed that Glencore merge the two businesses and demerge their combined coal businesses. Teck rejected the offer and cited exposure to Glencore’s thermal coal and oil trading businesses as unwanted.

Overall, Glencore has a strong commodity mix mining and trading oil, coal and gas, all of which are in high demand. The energy crisis is ongoing and the continued need for copper as part of the energy transition is clear. Although I don’t hold shares in Glencore, now could be the right point to add them to my energy portfolio.

The post Will the Glencore share price rebound after analysts raise their price target on this FTSE 100 commodity stock? appeared first on The Twelfth Magpie.

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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Gilly West has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Greggs (LSE: GRG), the popular high-street baker, posted strong results in January and is set for further expansion this year. After a turbulent 12 months, could this FTSE 250 stock be back on track?

Greggs saw sales rise substantially in the final quarter of 2022 to 18.2%, with festive specials such as mince pies and caramel lattes proving popular. Like-for-like sales were up on the previous year and the chain is set for expansion, with the ambition for another 150 stores to open during 2023.

Nonetheless, Greggs has faced some significant challenges over the past year. In the aftermath of the pandemic, issues have remained with supply shortages, energy price rises, and a change of management. And this may well continue in the near term.

Focus on value

Chief executive officer Roisin Currie, who took over the helm in May 2022, acknowledged cost inflation at 9% as the driver behind price rises on much-loved favourites such as sausage rolls. Currie cited value for money as key for customers during the cost-of-living crisis. In the first update of 2023 strong growth was attributed to a number of factors, including longer trading hours, greater availability of digital channels and more choice.

It seems there is a lot of potential for Greggs even while the cost-of-living crisis continues to bite. As a cheaper alternative to high-street regulars, such as Costa or Pret, Greggs could pick up customers who are looking to save money. Newly introduced ‘double up deals’ encourage customers to trade up and buy two items.

Greggs could also steal a march on competitors with its diverse range. Who can forget the impact of the vegan sausage roll on profits as it flew off the shelves in 2019? The Vegan Sausage, Bean & cheeZe Melt, reintroduced in February, is a strong contender to drive sales as well.

High-street stalwart

With the introduction of 11 new lines and a strong plant-based offering, Greggs certainly appeals to a wide customer base. Add in the ability to order through an app to earn rewards, or even have a takeaway delivered through the Just Eat partnership, Greggs could be seen as a low-cost easy treat.

Interestingly, a less-reported development could make a fundamental change to Greggs’ bottom line. A judge rejected Zurich’s limitation of Covid-19 interruption to business losses at one instance with a corresponding limit of £2.5m. The ruling stated that there were multiple interruption losses, each with a limit of £2.5m. Owing to the ruling, Greggs is likely to receive a significant payout in due course.

In spite of substantial recent rises in the share price, I still think that Greggs has a lot of potential to grow and is one of several high-street chains that will do well in the current economic environment. Whilst I am not invested at the current time, I am strongly considering adding this stock to my retail portfolio.

The post This FTSE 250 stock has risen 40% over the past 6 months. Should I buy in now? appeared first on The Twelfth Magpie.

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Gilly West has no position in any of the shares mentioned. The Motley Fool UK has recommended Just Eat Takeaway.com. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Jersey Oil and Gas (LSE:JOG), a FTSE AIM All-Share stock, has had a tumultuous time of late. The independent Jersey-based upstream oil and gas company is looking for a farm-out deal to develop the Greater Buchan Area. News about an investment deal was due in the Autumn with technical due diligence expected to complete in October. Investors will be keeping a keen eye on updates from Jersey Oil and Gas and wondering if delays are a cause for concern.

Andrew Benitz, CEO of Jersey Oil and Gas, stated in September that “great progress is being made with the farm-out process” and that “advanced and commercial discussions are ongoing with serious, well-funded counterparties”.

Since the interim results announcement, however, the share price has fallen considerably as time has passed with no deal. The news in November that recent windfall tax rises will last longer and be higher than expected, at 35%, could materially dent potential profits.

The calm before the storm?

At the end of November, Benitz looked to calm nerves by referring to the farm-out situation explicitly in a statement about an extension to the Verbier licence. Benitz made clear a deal is expected soon, stating that “if not by the end of the year then certainly in Q1 2023”.

Jersey Oil and Gas also sought to settle fears further by adding that the retention of the investment allowance as part of the UK’s Energy Profits Levy “is welcome”.

The share price has rebounded slightly on the back of the reassuring statement that news could be on the horizon at any moment. What, however, would a farm-out deal actually mean for Jersey Oil and Gas? The funding would allow production to restart from the Buchan field and development of the Greater Buchan Area that holds 172 barrels of discovered and recoverable oil. This would be welcome news for the UK government at a time when energy security is more vital than ever.

Risk vs reward

There are many potential unknowns here, such as what a final agreement could look like, plus the fact the oil price has slumped and this could deter future investment. The French super major Total has put off investment in the North Sea, rattled by changing circumstances.

Yet oil and gas demand is likely to recover, according to the International Energy Agency, with a forecast of a 2% rise taking oil to a record high of 1,016 million barrels per day. In addition, at least two analysts are tipping this share to go above 700p on investment news. With a strong cash position of £8.7m and no debt, I think this is a stock that could have strong potential at 250p per share as I write.

Whilst fledgling companies may not be for some, for me Jersey Oil and Gas makes an interesting addition to my portfolio as I believe it could see substantial growth in the long term.

The post Is this a good time to invest in this FTSE AIM All-Share stock? appeared first on The Twelfth Magpie.

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Gilly West holds shares in Jersey Oil and Gas. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

It’s a tough time for companies going through the energy transition, and equally tough for investors interested in this sector’s stocks to know where to turn.

Some see value in safe havens, wanting to squeeze every last drop of oil and gas out of the ground whilst the price of oil and gas is eye-wateringly high.

Increasingly, many private and institutional investors are bracing for a new world where renewables are the dominant energy sources.

This is all with the spectre of the pandemic in the rear window where the price of oil was in freefall, and hitting lows not seen for decades in early 2020.

Which path to tread?

Times are changing and the artists formerly known as ‘oilers’ are keen to reinvent themselves. BP (LSE:BP) wants to be seen as an integrated energy company, with CEO Bernard Looney stating that the company is “putting its money where its mouth is”.

Recent investments in renewable projects seem to confirm BP is a serious contender in the renewables space. It has taken a 40% stake in the Asian Renewable Energy Hub (AREH), touted as having the potential to be the world’s largest hydrogen hub. In early November, the company signed a Memorandum of Understanding with the Government of Mauritania to explore large-scale production of hydrogen. The company also recently acquired Archaea, a US biogas producer.

Whilst demand for hydrogen worldwide remains relatively low, it is set to soar by 2050, with biogas consumption set to double by 2040. Biogas and hydrogen are cited by the International Energy Agency as central to achieving net zero.

BP’s share price is making a steady comeback, yet it is not the trajectory expected by many investors given the price of oil and need for energy security. A cautious dividend strategy, reinvesting bumper profits into longer-term investments, and a reduction in oil and gas has deterred some investors.

It is worth noting, however, that the share price has risen a third (year to date) and is unlikely to see the lowest lows of 2020 again.

Exxon, however, rose to its highest of highs at market close on 20 October, $105.86 up 66% this year and is very clearly on a different trajectory, with CEO Darren Woods stating Exxon is not attempting to match the green investments of its peers.

In the short term, Exxon’s strategy is clearly paying literal dividends; in the longer term, underinvestment in the energy transition could mean latecomers to the party pay more, particularly as investors divest from fossil fuels.

No certainties

As with all stocks, only time will tell who are the winners and losers. There are no certainties, yet we do know the need for energy is growing exponentially — particularly renewable energy.

President Joe Biden’s Inflation Reduction Act sets the US on a pathway, and perhaps the world, to a green economy, with $369bn of spending earmarked for the transition to a low carbon economy.

With this in mind, I believe BP’s prudent approach to the energy transition would make it a good addition for me to a balanced energy portfolio

The post It’s not easy being green for energy stocks appeared first on The Twelfth Magpie.

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Gillian West has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.