Sur­prise, sur­prise

Finweek English Edition - - MARKETPLACE -

Hold­sport is a com­pany I haven’t liked but have been proven very wrong about, and now I should just throw in the towel. Sure, like-for-like sales in­creased 9.4% with prod­uct in­fla­tion of 8.1%, in­di­cat­ing very mod­est real growth of only 1.3%. Fur­ther, cash gen­er­ated from op­er­a­tions was down ever so slightly while core HEPS was up 21.3%, and the div­i­dend was up only 21.2%. So there are a num­ber of po­ten­tial con­cerns but the com­pany con­tin­ues to grow and, most im­por­tantly, it trades on a very mod­est his­toric price-to-earn­ings ra­tio (P/E) of some 11 times and a div­i­dend yield of just un­der 4.5%. Con­sid­er­ing many lo­cal re­tail­ers have a P/E of dou­ble that, Hold­sport is very far from be­ing ex­pen­sive. And be­ing cheap markedly re­duces the risk in the share. That said, just be­cause a share ex­ists doesn’t mean I have to own it and I have no plans to own Hold­sport.

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