At this crisis point in history - what could possibly create these rare and extraordinary gains?

An Arizona multi-millionaire's revolutionary initiative is 
helping average Americans  find quick and lasting stock market success.

Since the Coronavirus came into our lives this slice of the stock market has given ordinary people the chance to multiply their money by 96% in 21 days on JP Morgan.

Stocks  | January 7, 2020

The British retail sector might be in dire straits right now as Brexit-related tension crimps consumer appetite. But one UK-quoted business that continues to defy the broader gloom is JD Sports Fashion, and I’m expecting another joyful release when Christmas trading numbers are unpackaged on Friday, January 10.

The sportswear retailer’s share price exploded 133% in 2019 thanks to a steady stream of bubbly trading updates, the resilience of its operations at home and abroad allowing profits to keep marching northwards. Last time out in September the FTSE 250 firm advised that like-for-like sales across its European, Asian and North American divisions rose 12% in the six weeks to August 3, with underlying revenues in Britain continuing to grow by double-digit percentages as well.

JD Sports’s top line is booming because it is at the cutting edge of the ‘athleisure’ — also known as the sports casual — market, a segment which is the fastest-growing part of the global clothing and footwear market. And pleasingly for the retailer analysts expect it to continue swelling at a sprightly pace.

Grand View Research, for instance, expects the athleisure market to expand at a compound annual growth rate of 8.1% through the next five years and be worth a colossal $517.5 billion by 2025.

No wonder, then, that City analysts expect earnings at JD Sports to surge an extra 17% in the fiscal year to January 2020. A forward P/E ratio of 24.5 times might be high on paper, but the mighty success it is enjoying across the globe makes it worth such a premium.

The FTSE 100 Giant

I wouldn’t buy shares in Tesco this week, though. Christmas trading details are scheduled for release on Thursday, January 9, and I’m expecting numbers that could bring City expectations of ripping earnings growth (of 23%) in the financial year to February 2020 under extreme pressure.

The uncertain political and economic environment in the UK means that food shoppers continue to watch the pennies. Latest data from Kantar Worldpanel showed sales across the grocery sector rise just 0.5% in the 12 weeks to December 1, and it’s unlikely that Tesco et al’s tills got much noisier over the festive period.

And of course the traditional supermarkets have the growing influence of the German disruptors Aldi and Lidl, a point underlined just this week, to contend with too. Whilst sales growth in the four weeks to Christmas Eve fell short of forecasts, Aldi said that turnover expanded 7.9% to top out at more than £1 billion, illustrating in part the fruits of its aggressive store expansion programme.

FTSE 100 stock Tesco’s forward P/E ratio of 15 times might look attractive on paper but its uncertain long-term outlook makes it a risk too far, in my opinion.

A revolutionary initiative is helping average Americans find quick and lasting stock market success.

275% in one week on XLF - an index fund for the financial sector. Even 583%, in 7 days on XHB… an ETF of homebuilding companies in the S&P 500. 

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

You might also like

Stocks | January 28

Stocks | January 28

Investing, Stocks | January 27

Investing | January 27