One to watch: Burberry

Published on Wednesday 13 April 2011 21:37

BURBERRY designs, sources, makes and sells luxury men's, women's and children's clothing and accessories globally.

The latest update, covering the third quarter to 31 December, posted underlying growth of well over 30 per cent excluding a contribution from an increasing involvement in China.

The retail community is swathed in gloom, generally, but companies operating at the luxury end of the market offer defensive dimensions. Burberry enjoys a particularly well regarded management in the form of Angela Ahrendts, the chief executive, and Stacey Cartwright, vice-president and chief financial officer.

There are issues, not least the impact the tragic events in Japan might have on demand levels; certainly the stock was in the vanguard of the market's general sell-off that followed the appalling earthquake and tsunami.

Nevertheless, the longer-term prospects for Burberry look excellent. There are persistent rumours it may be the subject of an approach, although it is difficult to see how any other management team could add much of a premium to the incumbent.

Burberry

1,160p +28p

Scotsman says BUY

• The value of your investment could fall and you may get back less than you invested. Take professional advice if you have any doubt about the suitability of this company for your portfolio.

BROKER SNAPS

Standard Life

213.3p +0.7p

Broker says SELL

THE "bearish technical picture" on Standard Life's shares marks the Edinburgh-based insurance and pensions giant as "a sell for the near term", Galvan Research said. Head of research Andrew Gibson added: "The market is clearly less than impressed with the overall fundamental returns from Standard Life."

Home Retail Group

210.2p +2.2p

Broker says SELL

AHEAD of full-year results next week from Home Retail Group, Shore Capital has reiterated its "sell" recommendation on the owner of Argos and Homebase. The broker added: "We do not believe it is strong enough to repeat the 150 million share buy-back programme."