Stock market

At a 52-week low, this FTSE 100 stock looks like a huge opportunity.

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I share. FTSE 100 Discount retailer B&M European Value (LSE:BME) has fallen 13% year-to-date. At today’s prices, the stock looks like a bargain.

The company is growing well, has a strong competitive position, and trades at a strong valuation. This is a combination that can generate strong returns for investors.


Retailers can grow in two ways. One is to open more stores and the other is to find ways to generate more profit from our existing outlets.

At its latest trading update, B&M announced a 10% increase in revenue over the previous year. And about two-thirds of that came from opening new stores.

Part of this has been business taking advantage of the short-term opportunity. Wilco’s bankruptcy allowed B&M to acquire some of its units at bargain prices.

The company expects to nearly double its store count in the long term. Hence there should be ample room for future growth from a wider number of outlets.


Shares of B&M trade at a price-to-earnings (P/E) ratio of about 13. This is important for a few reasons.

Firstly, it is in line with the FTSE 100 average. So in terms of the index, I see this as a better-than-average business trading at an average price.

B&M European Value P/E Ratio 2015-2024

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Second, it’s low by the company’s historical standards. Stocks have typically traded higher over the past decade, making it a relatively good time to consider buying.

On top of that, the company’s growth means today’s prices represent a forward P/E ratio of 12. All of this means that I think the price looks exceptionally attractive at the moment.


The biggest risk with retail is competition. The likes of Lidl and Aldi are fierce competitors and there is virtually nothing the companies can do to stop price-hunting consumers.

It’s worth noting, though, that this has been the case for some time. And B&M has been able to maintain strong profit levels.

Operating margin B&M vs Tesco

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Over the past 10 years, the company has consistently maintained operating margins above 10%. It is more than double. Tesco achieved during the same period.

This is an indication that the company has a strong competitive position. And that’s the kind of thing that makes stocks a good long-term investment.

Shopping opportunities

B&M looks like a resilient business with good prospects for future growth. And it’s currently trading at an exceptionally good price.

This could be a winning combination for investors. Stocks don’t get the attention they deserve, but that’s often where the best opportunities come from.

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