This week, we are keeping a close eye on B&M (LON: BME), Asos (LON: ASC), and Ocado (LON: OCDO). Here’s Why:
- B&M: The discount retailer has been on a tear in recent weeks. Its share price is up over 17% in the past three months and 33% so far in 2023. The company has benefited from strong demand, benefitting from consumers trading down. According to Semrush, the company has maintained the majority of its web traffic gains following the pandemic, suggesting the consumer appetite for its products remains elevated.
- Asos: The online fashion retailer reported earnings last week, returning to profitability but revealing a revenue decline. Demand is being pressured as consumers choose cheaper alternatives such as Boohoo and Shein during a high inflationary environment. However, we have noticed a rise in Twitter mentions (a sign of increasing demand) in recent weeks, although consumer happiness skews slightly negative.
- Ocado: The online grocery retailer’s share price has struggled for more than a year as demand waned due to inflation and the end of pandemic-related restrictions. As a result, it has become the most-shorted London-listed stock. While its shares have risen in the last week, Twitter mentions remain low.
Despite the struggles of Asos and Ocado in recent years, all three stocks are still seen as having long-term potential. However, it’s B&M that is well-positioned to benefit from the ongoing trend of discount shopping, and while it may pull back slightly after the recent surge, we see it higher over the medium term.
By Sam Boughedda