TRADE of the MONTH
Sensible fashion: Dress your portfolio with TFG or Mr Price?
TFG’s decision to diversify internationally is bearing good fruit
Clothing and footwear sales fell off a cliff in the first quarter of the year, plunging 6.4% year on year. More than ever it highlights the wisdom of a strategy in which international diversification plays a key role. It is an approach The Foschini Group (TFG) has taken with great success, but one that Mr Price has failed to in any meaningful way. This is a shortcoming of Mr Price’s that comes at a time when its performance in its home market is far from being up to scratch. It makes TFG the clothing retail sector share to buy and Mr Price the one to go short on. This is all the more so given the difference in the two shares’ ratings: TFG on a 13.2 p:e and Mr Price on a demanding 17.2 p:e, despite its share price having fallen over 20% in the past 12 months. From a performance perspective, TFG had the edge on Mr Price in their latest financial years, which ended on March 31 and April 1 respectively. TFG crossed the finishing line with its headline EPS (HEPS) up 4.1%, and while that ...
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