MoPh Markets

AO World, Sainsbury’s, Amigo Loans: 3 Stocks to Watch This Week

Last week our picks (Ocado, Moonpig, and Cineworld) all performed as expected, with moves lower.

Although, we can’t claim to have predicted such a dramatic slide in Cineworld shares, which fell almost 60% after the WSJ said it is preparing to file for bankruptcy.

So, with that little confidence boost and the knowledge that it can’t always go as well as last week, we are less aggressive in our predictions this time but have our eyes on AO World, Sainsbury’s, and Amigo Loans…here’s why:

AO World (LON: AO)

Source: Semrush
  • AO World reported earnings for the year ended 31 March 2022 last week, with its shares initially rallying after the company forecasted a profit for fiscal 2023 above market expectations. 
  • However, the electrical retailer has various issues, including rising costs, fading consumer spending, dwindling demand, and supply chain issues. 
  • In addition, the company reported a £37m loss before tax compared to a £20m profit in 2021.
  • We aren’t very positive about the stock, but at such lows, it is one to watch next week. 

Sainsbury’s (LON: SBRY)

Source: Semrush
  • When looking at Sainsbury’s most recent trading update, the company said that while online order numbers continue to normalise as more customers return to the store, they are pleased with their market share performance as they “hold on to customers gained during the pandemic.” 
  • In addition, analysing its web traffic, we can see a jump from around 10.8 million in March 2020 to just under 21 million in April 2021.
  • It has since dropped off somewhat, but it is still well above pre-pandemic levels at 17.5 million, suggesting their above statement potentially rings true.
  • While we are not yet fully convinced by the stock, there are many factors to like, such as customer retention, its share price still at significant lows, and its growing dividend over the last few years.

Amigo Loans (LON: AMGO)

  • Amigo Loans is set to report its financial results for the three-month period to 30 June 2022 on 25 August 2022.
  • The struggling lender’s shares are down significantly since 2019, and current online demand metrics for the company do not look good.
  • At a time when consumer wallets are being stretched, there is a case that the lender’s demand may increase; however, Google Trends suggests that is not the case, with searches continuing to edge lower.
  • We expect a fall in demand, but with shares at such lows, as we saw with AO World, the initial reaction to the release could be somewhat unpredictable.

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