I have entered my first buy at 2339 small position as I am getting in a little early. I have a larger buy for 2195 and another at 2135 as price approaches the weekly support area highlighted.
Shares have tumbled 60% from their post pandemic high, and 71% from their ATH.
The company has been rocked by the sudden and unexpected departure of their CEO, rising supply chain cost pressures, and consumers returning products at their pre pandemic levels (during the pandemic the company noted there was a sharp decline in returns which gave a £67m cost saving).
This has resulted in a warning that profits could fall by as much as 40%
It feels like the market has over reacted to the news, especially given that sales rose 22% and the brand continues to be a leading player in the online fashion industry despite an intensely competitive landscape. RSI also is into oversold territory on the weekly. Losing the £67m in cost saving due to lower rate of returns should always have been expected given it was a result of pandemic / lockdowns.
Asos PE is 13.8 VS UK Online Retail average of 24.6 The company is DEBT FREE
Just to repeat the first line, this will be a long term holding for me. It doesn't look as if there is a near term catalyst that will rocket shares up in the coming days - but happy to hold these for a while.