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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Sports Direct - Bonus targets made tougher

April 2014

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:
  • SPD
  • Price:
  • 836p
Since our last update the shares have risen from 712p to a high of 862p after founder and majority shareholder, Mike Ashley, who takes no salary from the company, requisitioned a special meeting to vote through a bonus share scheme that could see him trouser 8 million nil cost options (1.3% of the share capital, currently worth c. £65m). Amidst the usual howls from corporate governance luminaries investors spotted that he would need to grow EBITDA from £288m to £330m in 2014 and £410m in 2015, which is around 8% ahead of analysts’ forecasts – while net debt to EBITDA must be lower than 1.5 times by year end ‘15. Historically, the group has had a knack for achieving these bonus targets. A main write-up at 348p in Octob ...

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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.

All material on this website is protected by copyright. You may use Information retrieved from the www.scsw.co.uk website for your own personal non-commercial use which means that you may not sell or copy this information to any third party without prior written consent. ISSN 1358-183X

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