As a long-term investor who likes to buy into in world-class businesses, I tend to steer clear of really cheap stocks. Twenty years of investing in the stock market has taught me that cheap stocks are often cheap for a reason. Recently though, I spotted a Footsie stock with a very low and I decided to snap it up for my ISA.
Here’s a look at the stock and why I bought it. I’ve owned this Footsie stock before The stock’s ( ), the athletic footwear and sportswear retailer that has over 4,000 stores worldwide. I’ve owned this stock in the past and done very well from it.
So it’s not a totally new holding for me. Why did I buy it again? Well, there are a few reasons. One is that it gives me exposure to several brands including , , , and Hoka.
I like this diversification. Up until recently, I owned some shares in Nike. But that company’s rapidly losing market share to On and Hoka right now so I sold the shares and put the money into this company instead.
Another is that JD has a ton of stores for consumers to visit. For many consumers in the athletic footwear market, going to stores to check out and try on new shoes is part of the buying experience. A few years ago, Nike tried to pivot to an e-commerce model.
This backfired massively (and let other brands grab market share) as consumers wanted to buy shoes in store. It’s worth noting here that JD’s stores are often quite slick and this is giving it an edge in the US. “ ,” said CEO Regis Schultz on a recent earni.