LOOK (Lookers) is a car retailer and distributor.
It issued an IMS on 14 May (http://is.gd/iAasp4), saying:
The company produced a strong trading performance in the quarter to 31 March 2015, particularly during the important month of March and the Board is very pleased to yet again report a record result for the period. This positive result was a healthy improvement on the corresponding period in 2014. … The financial performance of the group in the three month period builds on what was already a strong comparative in the previous year. We therefore believe that the results for the year ending 31 December 2015 should be in line with current market expectations.
The market reacted well to the news, sending the shares up 2.1%.
I own shares in LOOK, and it has mostly been an uneventful ride for me, having seen only a 10.4% gain since I bought them in March 2014. The outlook for car sales were looking positive at the time, the shares were on a modest valuation, so I was bullish on the stock. Consequently, I had hoped to see much more action from them, but it has not been the case.
Having said that, I do like the market’s recent reaction to the recent news. It has a Stockopedia value rank of 63, which doesn’t make it a screaming bargain. However, it does have a momentum score of 94, which is good, and an overall stock rank of 97. It also passes 6 Stockopedia screens. Among them is the Value Momentum screen. It’s not a screen that I have used that much, but I like the logic of combining momentum with a reasonable PEG score. People can, of course, argue that PEG is not value, but I do think it is worthy of some consideration as a scale of PE against growth expectations.
Price versus its 50dMA is 6.1%, so if you’re looking for a momentum trade, for example, you perhaps don’t have to worry about being technically overbought. RSI is 66%, however, which is edging towards 70, an area that would be considered overbought.
I’m happy to hold this one, and hope that we can see further gains.