I still believe in SGP’s ability to grow. At a PE of 14.3 with expected double-digit earnings growth, and coming off being oversold, the shares look good value to me. I am not currently a holder.
One month ago, I wrote an article on SGP (Supergroup)
(http://wp.me/p2eZvw-Hj). The shares were trading at 977p. I thought that the combination of being oversold and being on PE of 15.5 with double-digit growth represented a good entry point.
I was partially right in my thinking. The shares rallied to 1170p shortly afterwards, for a near 20% gain. The downtrend resumed, however, there was a deathcross, and the shares reached an intraday low of around 800p. The shares now trade at 922.5p.
If I had bought at 977pa month ago, then I would not have sold, because they were never overbought thereafter. So I would have ridden the stock all the way down.
Currently, the shares are coming off of oversold again, which I view as a positive sign.
What I find amazing is that the shares are now cheaper than when I sold last July. I had expressed dismay at seeing the price shoot up well above my sell price. It turns out that the sell wasn’t so bad after all.
The stock market is truly a strange and mysterious beast. I seem to have only a weak grasp of it, at best. My portfolio performance this tax year, so far, has been abysmal, where I am under-performing the All-Share by around 15.5%. That’s painful. We are only part way through the tax year, so it remains to be seen how the rest of the year pans out. Reviewing the decisions I have made, some of them seem very boneheaded indeed. The good news is that when I have underperformed for a year, I have (so far) come back with a vengeance. So it never pays to be too despondent and quit the game.
So take anything I say with a pinch of salt.