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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Dunelm

April 2011

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • DNLM
  • Price:
  • 405p
Our recommendation to take profits in specialist out-of-town homewares retailer Dunelm at 489p looks well-timed with the shares coming back to 405p.The pull-back reflects a period of consolidation for the group with interim results showing a 5% rise in pretax profit to £48.5m and 7.5% increase in eps to 17.1.p. Cashflow rose 4.6% to £63.5m, leading to net cash of £34.3m.Although like-for-like sales for the 26 weeks to 1 January fell 1.2%, albeit against very strong comparatives (2009: 13.4% increase), gross margins rose 110 basis points, as it exited its summer sale with low levels of marked-down stock and achieved price increases in the latter part of the period ahead of the VAT increase and more than offset cost price ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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