Primary Recommendation

Associated British Foods - Discount clothing chain Primark driving up shares

March 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.

As politicians debate how to solve the cost of living crisis one company that is doing its bit to give consumers bang for their buck is Primark, a value clothing retailer, which sells a jumper dress for Â£3, a fleece for Â£1.50 and a pair of boots for Â£5. Not surprisingly in these austerity haunted times Primark's model of â€˜pile it highâ€™ fashion clothing, presented in large, well-located stores has proved hugely successful, driving a seven-fold rise in operating profit to Â£514m between 2002-2013. This largely explains the fantastic share price performance (see chart) of its owner, Associated British Foods, a diversified international food, ingredients and retail group, whose interests also span sugar production and grocery products ...

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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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