Why I’d add Superdry shares to my ISA today

first_imgWhy I’d add Superdry shares to my ISA today Simply click below to discover how you can take advantage of this. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Enter Your Email Address See all posts by Rupert Hargreaves Rupert Hargreaves | Tuesday, 30th March, 2021 | More on: SDRY Superdry (LSE: SDRY) shares used to be one of the most sought-after investments on the London Stock Exchange. That came to an end in 2018. The value of the stock peaked at £20.78 in January 2018. Since then it has fallen more than 90%. Recently however, investor sentiment towards the business has begun to improve. Over the past six months, Superdry shares have added 70%. 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…I think this could be just the start of a much bigger recovery for the stock. As such, I’m planning to add the investment to my ISA. Superdry shares on offerThe fashion company has been in the doldrums for two years. Unlike many other retailers, which entered 2020 on a high, Superdry was struggling even before the pandemic. The group’s losses totalled £99m in fiscal 2019. Losses hit a further £143m in 2020.The good news is, City analysts expect the company’s fortunes to improve this year. Losses are projected to shrink to £31m. That’s not great, but it will be the lowest loss figure in three years. The group is then expected to return to profit in 2022.Of course, these are just forecasts, and there’s no guarantee Superdry will return to profit next year. However, I think they show the company’s potential. Indeed, even though the business has been losing money, it turned over £700m in 2020. This suggests consumers are still happy to buy the brand. What’s more, at the end of its fiscal first half, the company reported net cash on its balance sheet of £34m. I think this gives the business plenty of flexibility and, more importantly, time to instigate a turnaround. Turnaround in progress The turnaround already seems to me to be taking shape. While overall sales plunged 23.4% in the six months to 24 October 2020, online sales jumped 49.8%. E-sales now account for more than 50% of retail revenues. The figure was around 27% before the pandemic. I reckon these numbers suggest Superdry can survive the current storm. With a more significant digital business, it may even emerge stronger on the other side. This could be incredibly positive for Superdry shares. It’s impossible to predict how profitable the company could ultimately become, but between 2015 and 2018, the organisation reported an average annual net income of £51m.If it returns to this level of profitability, the company looks cheap. Its current market capitalisation stands at £212m. Risks and challenges This is only a rough guide. The retail industry is incredibly competitive, and there’s no guarantee Superdry’s sales and profits will ever return to historic levels. The company may never return to its former glory. Further, the group still has a large brick-and-mortar store base.With the retail sector allowed to open from 12 April, these stores may start to earn their keep. However, the challenges facing physical stores have been well documented. There’s also no guarantee stores will be allowed to stay open (should a Lockdown 4 be required), or if this is the last time they’ll be forced to close. Therefore, while Superdry shares do look attractive based on their growth potential, the company faces many risks. This isn’t an investment for the faint-hearted. Nevertheless, as I’m comfortable with the level of risk involved, I’d buy the stock for my ISA today.center_img 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. Our 6 ‘Best Buys Now’ Shares Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. 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. 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July 5, 2021 0