Insights for September 2018

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Posted by ShrutiAggarwal on 10 September 2018, 2:09 PM

Marks and spenser, an avoid at current levels

Marks and Spenser is an avoid at the current levels as the valuation also shows that the company is fairly priced at the current level. The stock finished trading on the London stock exchange at 291p on 10th September, down by 0.78% compared to the last close. The stock has been trading below 20 DMA (Day moving average), 50 DMA and 100 DMA of 299p, 305p and 292p respectively. Trading below the short term moving averages generally doesn’t go well with the bulls! In terms of technical analysis or charting also, the stock is forming head and shoulders pattern and in case the stocks goes below 290p, it may see a retest of lows of 260-270. Therefore traders or investors shall avoid initiating any long in the company till we see any signs of consolidation or up move. The immediate support and resistance lies at 288p and 299p respectively. Traders or investors would be advised to keep an eye at the respective levels and accordingly hedge the positions.

As per the company’s FY’18 results, the company reported a flat growth in revenue of 0.7% year on year.  The retail giant’s profit before tax and after adjusting the non-recurring items was down by 5.4% year on year because of the decrease in food gross margin. Nonrecurring items of £514.1m included £321.1m for company’s UK store estate closure programme.  As per the management guidance, cash costs of transformation remain in line with plan. However, the good news for the investors is that the company’s net debt has reduced significantly by £107.2m. (Read more)

Topics: Analysis
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