We glory within the apply of letting our writers and our analysts put ahead views that don’t agree with one another, or with the “official” suggestions of our subscription-based advisory companies, as a result of we consider that leads traders to contemplate a number of sides to the investing argument. Two of the 5 FTSE 350 shares talked about listed here are really useful inside our companies. Why not talk about with family and friends whether or not you agree with the writers beneath!
Aston Martin Lagonda
What it does: Warwick-based Aston Martin Lagonda International Holdings is a luxurious automobile firm.
By Paul Summers. Having fallen 96% since itemizing, absolutely the one manner is up for Aston Martin Lagonda (LSE: AML) shares? As issues stand, I’m not satisfied. It might simply worsen for a corporation now on its fourth CEO in 4 years.
My subject isn’t the attractive vehicles; it’s the mountain of debt on its stability sheet. That is at the moment across the identical as the worth of the agency itself (£1.3bn). That’s hardly a strong basis for a rip-roaring restoration. Then once more, I’m not shocked. Aston Martin has gone bankrupt seven occasions earlier than.
To be truthful, the complete luxurious sector is struggling. And at the least the board has predicted that volumes and income will rise within the second half of 2024. If this may proceed into 2025 and past, I’d change my opinion.
However proper now, it is a punt inventory and nothing extra.
Paul Summers has no place in Aston Martin Lagonda International Holdings.
Burberry
What it does: Burberry is likely one of the world’s greatest style homes with greater than 450 shops throughout the globe.
By Royston Wild. The Burberry (LSE:BRBY) share worth has crumbled by round 50% up to now six months. The style large’s now misplaced three-quarters of its worth over the previous yr, and it’s robust to see the way it breaks out of the downtrend that started in Could 2023.
Buyers have been spooked by the agency’s failure to boost income steerage again then. However issues have gone from mildly regarding to outright alarming over time, its realignment to concentrate on the ultra-expensive finish of the posh items market backfiring spectacularly.
Newest financials confirmed gross sales down 22% within the three months to June. So Burberry’s hoping the appointment of Joshua Schulman as new chief govt in July will spark a restoration. Schulman’s an trade veteran with profitable stints on the likes of Jimmy Choo and Michael Kors, so that have might show extraordinarily fruitful for the enterprise.
It could show a masterstroke. Nevertheless, turning Burberry spherical is a troublesome job, because the merry-go-round of CEOs in latest occasions has proved. And Schulman’s activity is very tough towards the backdrop a struggling luxurious sector.
I can see the FTSE 100 agency persevering with to battle.
Royston Wild doesn’t personal shares in Burberry.
Dowlais Group
What it does: Dowlais is a gaggle of automotive engineering companies centered on the transition to sustainable autos.
By Mark David Hartley. To say Dowlais Group (LSE: DWL) has had a nasty yr can be an understatement. It solely went public simply over a yr in the past and already the shares are down 50%. The corporate was shaped in 2023 as a demerger of two firms from aerospace producer Melrose Industries. It operates as a set of engineering companies centered on sustainable autos. With the marketplace for sustainable autos anticipated to develop considerably, the corporate is well-positioned to learn.
Regardless of bringing in £1.14bn in income final yr, it posted a £50.5m loss, with earnings per shares (EPS) at -4p. Nevertheless, such losses aren’t that unusual for newly-listed firms. Gross sales-wise, it appears to be doing effectively, with a price-to-sales (P/S) ratio of 0.16. I feel the shares might nonetheless fall additional however with a 9.78% dividend yield, the low worth appears an ideal alternative to seize them whereas low cost.
Mark David Hartley doesn’t personal shares in any firms talked about.
Ocado Group
What it does: Ocado Group is a grocery retailer, e-commerce and logistics enterprise with a presence in 12 international locations.
By James Beard. With its share worth plummeting 70% since September 2019, I feel Ocado Group (LSE:OCDO) qualifies as a FTSE flop.
Its favorite measure of profitability is EBITDA (earnings earlier than curiosity, tax, depreciation and amortisation) which was £51.6m in the course of the yr ended 3 December 2023 (FY23). However it’s borrowed closely to put money into its intelligent know-how which is able to want changing at some stage. This implies its ‘I’ and ‘D’ are vital — its FY23 pre-tax loss was £393.6m.
Presently, its three way partnership with Marks & Spencer accounts for about 70% of income.
However Ocado describes itself as a know-how enterprise and sees a path to profitability via licensing its platform to 3rd events and offering automated warehousing options and supply companies to others.
Nevertheless, regardless of being round for twenty-four years, there’s no fast prospect of the corporate shifting into the black. For that reason, I wouldn’t contact the inventory with a bargepole.
James Beard doesn’t personal shares in Ocado Group.
Vodafone
What it does: Vodafone is a multinational telecommunications large. Through the dotcom growth, it was the biggest firm in Europe by market capitalisation.
By Charlie Keough. Regardless of posting a acquire this yr, Vodafone (LSE: VOD) has been a horrible performer in latest occasions. Within the final 12 months, its share worth is down by 1.8%. Within the final 5 years, the inventory has misplaced a whopping 52.2% of its worth.
Whereas it could look low cost on paper, I feel the inventory may very well be a traditional worth lure. It’s one I’ll be avoiding including to my portfolio anytime quickly.
Its shares look on the costly facet. On the time of writing, they commerce on 20.9 occasions earnings, comfortably above the FTSE 100 common of 11.
Granted, the enterprise has been in transition, which I need to think about. And it has turnaround potential. As a part of its streamlining mission, it has offloaded underperforming companies to boost money.
However I’m postpone the big debt it has on its stability sheet. I feel that might halt progress shifting ahead.
Charlie Keough doesn’t personal shares in Vodafone.
