Is the falling Superdry share price an opportunity or one to avoid?

Jabran Khan — Tue, 26 Jul 2022 14:07:00 +0000

I noticed that Superdry (LSE:SDRY) shares are still on a downward spiral. I want to explore if the share price at current levels is an opportunity to buy cheap shares for my portfolio with a view to a longer term recovery. Let’s take a look to help me decide if I should add the shares to my holdings.

As a quick reminder, Superdry is a UK-based clothing brand with an extensive presence operating over 700 branded stores across 61 countries. Its products combine vintage American style with Japanese-inspired graphics.

So what’s the current state of play with Superdry shares? Well, as I write, the shares are trading for 134p. At this time last year, the stock was trading for 385p, which is a significant 65% decrease over a 12-month period.

The bull and bear case

Superdry has seen its brand recognition and performance fall by the wayside in recent years. I admit I used to own many Superdry items many years ago whereas now I wouldn’t consider them. I suppose this is the nature of fashion, trends change. The rise of online fast fashion has hurt brands like Superdry massively too. Online disruptors with their cost-effective alternatives have surpassed more traditional retailers like Superdry.

Looking at performance, I can see Superdry’s revenue and profit has been falling year on year for some time now. This is not a great omen from an investment point of view.

Superdry has attempted to take steps to regain traction, and boost performance levels. In recent times, it released a series of new collections to try and appeal to the masses once more. Personally, I’m not sure this will be enough to kick start a recovery.

In respect to the business side of things, Superdry has looked to increase efficiencies and cut costs. It has decided to utilise robot technology to streamline operations in its warehouses. This initiative could help cut costs and boost an ailing balance sheet.

Another potential positive I noted was that Superdry CEO Julian Dunkerton purchased over £1m worth of shares at the end of May. Insiders buying shares is usually viewed as positive. This is because if those charged with the success of the business, who have the inside track, are willing to part with their cash, then perhaps investors like me should follow suit.

My verdict

Reviewing the investment case, I would not add Superdry shares to my holdings. The negatives outweigh the positives for me. Furthermore, macroeconomic headwinds such as rising costs and the supply chain crisis could have a further detrimental impact on the business. Rising costs could squeeze profit margins that are already under pressure. The supply chain crisis could affect operations and sales.

I wouldn’t be surprised to see the Superdry share price fall further and I believe it could be a long, tough road back for it. There are better stocks out there that I plan to add to my holdings that have better growth prospects and already provide consistent and stable returns.

The post Is the falling Superdry share price an opportunity or one to avoid? appeared first on The Twelfth Magpie.

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Jabran Khan 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.

Director dealings: Superdry, Foxtons, Big Technologies

John Choong — Fri, 03 Jun 2022 06:48:00 +0000

Director dealings are essentially insider transactions for shares between directors and the companies they work for. These dealings are always made public, and are often considered a good indicator of a company’s future prospects. However, they don’t get nearly as much attention as other company news due to their complex nature. Nonetheless, here I’m breaking down this week’s biggest director dealings from three FTSE firms.

Superdry

Superdry (LSE: SDRY) is a clothing company. It designs, produces, and sells clothing items and accessories. This is done primarily under the Superdry brand. With the Superdry share price down by 35% this year, a huge director transaction was executed. The purchase of a large sum of shares could boost investor sentiment.

Name: Julian Dunkerton
Position of director: Chief Executive Officer
Nature of transaction: Acquisition of shares
Date of transaction: 27 May 2022
Amount purchased: 1,805,172 @ Â£1.42
Total value: Â£1,144,954.58

Foxtons

Second on the list of director dealings is Foxtons (LSE: FOXT). The firm is a British-based estate agency. Foxtons serves as a go-between to buy, sell, and let properties. The Foxtons share price has had a slight hiccup this year, down 5%. A high-ranking director took the opportunity to purchase a substantial amount of shares.

Name: Nigel Rich
Position of director: Chairman
Nature of transaction: Acquisition of shares
Date of transaction: 30 May 2022
Amount purchased: 140,000 @ Â£0.39
Total value: Â£54,180

Big Technologies

Last on the list of director dealings is Big Technologies (LSE: BIG). Big Technologies provides products and services to the remote and personal monitoring industry. It does so under the Buddi brand name in the United Kingdom, Australia, the US, and Colombia. Its share price is firmly in the red at -15% this year. However, this didn’t stop a top director from transferring a number of leftover shares to his self-invested personal pension (SIPP) account after buying and selling.

Name: Daren Morris
Position of director: Chief Financial Officer
Nature of transaction: Acquisition of shares
Date of transaction: 27 May 2022
Amount purchased: 10,000 @ Â£2.91
Total value: Â£29,100

Name: Daren Morris
Position of director: Chief Financial Officer
Nature of transaction: Disposal of shares
Date of transaction: 27 May 2022
Amount sold: 10,000 @ Â£2.83
Total value: Â£28,300

Name: Daren Morris
Position of director: Chief Financial Officer
Nature of transaction: Acquisition of shares
Date of transaction: 30 May 2022
Amount purchased: 15,000 @ Â£2.82
Total value: Â£42,300

Name: Daren Morris
Position of director: Chief Financial Officer
Nature of transaction: Disposal of shares
Date of transaction: 30 May 2022
Amount sold: 15,000 @ Â£2.81
Total value: Â£42,150

Types of shares in a SIP

To provide context, there are a few types of shares within a company’s share incentive plan (SIP). A SIP is an employee plan for companies within the UK to flexibly award equity to employees. Publicly listed companies normally exercise this option because itâs tax-efficient for both the employer and its employees.

Types of shares within a SIP (Source: BDO.co.uk)

In this instance, partnership shares were bought and sold from the deals listed. Employees are usually allowed to buy shares on a monthly basis through a SIP. But they can also buy shares at the end of an âaccumulation periodâ. If there is one in effect, employees can buy shares at the market value either at the beginning or end of the period.

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