I love buying value shares , especially if they offer ultra-high yields as a result. These two stocks score on both measures but there’s also something iffy about them. For years, luxury retailer ( ) traded at pricey valuation of 24 or 25 times earnings.
But it looks dirt cheap today with a P/E ratio of just 7.99 times. Yet that doesn’t necessarily make it good value.
A quick search suggests it offers a massive 10.33% trailing yield, but that’s also misleading. The board axed shareholder payouts on 15 July, after issuing another profit warning and ditching CEO Jonathan Akeroyd.
There’s no forward yield. Can the share price recover? Burberry is my biggest flop in years. I’m down 44% on the stock, and that’s despite buying after its initial profit warning.
Now I won’t get any dividends either. Others have it worse. Over 12 months, the Burberry share price is down 76%.
Chair Gerry Murphy says it’s on course for a first-half operating loss, but things could pick up in the second half of the year. Brave investors could reap the rewards if it outperforms. Sales are down everywhere it operates, including Europe, the Middle East, India, Africa, Asia-Pacific and the Americas.
as interest rates fall and shoppers feel richer, but its troubles go deeper. I was out and about over the weekend, and its famous check appeared just once: on a baseball cap worn by a spotty teenager who was nobody’s idea of aspirational. The recovery will take years unless a buyer swoops and sn.