Recently the Management in an interview has given clarifications on some of the issues:
1) The margins are to be in the range of 15% in the next few quarters.
2) Production from the tie up with Adidas will start coming into the market from Dec 2015 onwards.
3) The company has maintained its market rate of 20% in the premium lovable brand.
4) They do not see online retail as a threat but as an opportunity to expand the distribution of their products.
This is basically a consumption story…as the economy grows and as disposable incomes rise, more and more women will go for branded lingerie. The progress of this company cannot be monitored on a quarter to quarter basis except to use any price fall to add more to the portfolio. This is a long gestation stock and requires quite some time to bloom …but the returns for the patient investors can be quite huge.
A better way of monitoring the progress would be with the help of long term charts – Monthly and weekly. And on both this charts the stock is showing clear signs of bottom formation and turnaround.
For making purchase the two trend lines ( dealing with earlier lows and the present low points) present a very good entry guidelines for those making their first purchase in Lovabe Lingerie..
Those making the purchase according to these trendlines can take huge comfort from the fact that they are purchasing a company with immense potential, one in which reputed value investors hold a good quantity at a much higher price ,,,,at a very good price and at a time when the bottom formation process appears to be over and the risk reward ratio favours investors.
A good company with very good fundamentals and at a technically very good price…Highly recommended even in this turbulent market.
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