Here’s why I think the Boohoo share price is just getting started

Here’s why I think the Boohoo share price is just getting started

July 5, 2021 pfefptdfkerv 0

first_img See all posts by Paul Summers Paul Summers | Tuesday, 26th January, 2021 | More on: BOO Here’s why I think the Boohoo share price is just getting started Simply click below to discover how you can take advantage of this. Enter Your Email Address Get the full details on this £5 stock now – while your report is free. Image sources: Getty Images. Paul Summers owns shares in boohoo group. The Motley Fool UK has recommended boohoo group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.center_img Our 6 ‘Best Buys Now’ Shares I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. FREE REPORT: Why this £5 stock could be set to surge The Boohoo (LSE: BOO) share price was in fine form yesterday following the announcement of its deal to acquire the brand and website of department store Debenhams. As a holder, this news makes me even more confident that my stake in the company can steadily appreciate over the next few years. Let me explain why.Bullish on BoohooThe capture of Debenhams looks sound for a few reasons. First, it shows the level of Boohoo’s ambition. By marking its foray into new markets — beauty, sports and homewares — the company can’t be accused of resting on its laurels. Developing “the UK’s largest marketplace” should ensure it reaches an even wider audience with an increasing number of brands. On top of this, the Debenhams acquisition also gives Boohoo another route to selling its own clothes. These now include more ‘mature’ labels such as Oasis and Coast as well as the hyper-popular PrettyLittleThing. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Then there’s the price tag. For £55m, the Manchester-based business will adopt and relaunch a website that receives 300 million or so visits per annum. It also made roughly £400m in revenue last year. When one considers that Boohoo isn’t taking on the burden of any of the physical stores or stock, that looks like a blinding deal. Other attractionsAnother reason for me thinking Boohoo’s share price could rise over the next few years relates to the current valuation. A price-to-earnings (P/E) ratio of 32 looks increasingly reasonable for a company making money hand over fist, even during a pandemic. The argument becomes even stronger to me when it’s considered that many loss-making companies across the pond are trading at bubble-like prices. Evidence of a speedy fix to the supply chain problems that dogged the company last year should add more pennies to the Boohoo share price. In fact, the Environmental Social Governance (ESG) funds that were quick to dump their holdings may suddenly find themselves needing to pay a far higher price to buy back in. So, Boohoo is bulletproof?I wouldn’t go that far. While bullish on the AIM-listed star’s future, I also think it’s vital to speculate on what may go wrong.For one, Boohoo’s growing list of brands could become problematic. As competent as management appears to be at integrating acquisitions, there’s a risk it may be attempting to spin too many plates too soon.There’s also a possibility that Boohoo might lose its popularity among its key demographic, namely young women. Fashion is a truly fickle industry. There’s only so far savvy marketing and a strong social media presence will take you.  As far as the shares are concerned, Boohoo could even fall victim to a flight to value in the near term. This wouldn’t be unreasonable. Some high-quality, high growth UK stocks made investors rich in 2020. The Boohoo share price has doubled since the dark days of March 2020. Some eventual profit-taking is inevitable.Just the startBut ultimately, where the Boohoo shares go in the next few weeks and months is irrelevant to me. As a long-term holder, I place more importance on the company taking advantage of opportunities now to reap the rewards later. The Debenhams deal is a good example of this. In fact, I’d be surprised if further acquisitions weren’t announced soon. Without a doubt, Boohoo has the cash to splash. Are you on the lookout for UK growth stocks?If so, get this FREE no-strings report now.While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.And the performance of this company really is stunning.In 2019, it returned £150million to shareholders through buybacks and dividends.We believe its financial position is about as solid as anything we’ve seen.Since 2016, annual revenues increased 31%In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259Operating cash flow is up 47%. (Even its operating margins are rising every year!)Quite simply, we believe it’s a fantastic Foolish growth pick.What’s more, it deserves your attention today.So please don’t wait another moment.last_img

 

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