London Evening Standard, market report column
Jan 08, 2013 (London Evening Standard - McClatchy-Tribune Information Services via COMTEX) --
If you bought in to a certain online fashion retailer in 2001 then you will have done very well, but buying shares in Asos is now out of fashion, according to City scribblers.
Analysts at Jefferies have downgraded the stock from buy to underperform, meaning it is time to sell. Jefferies' David Reynolds doesn't think Asos has done anything wrong, he just has a "sense that the risk/reward profile has changed".
He reckons its plan to move in to Russia and China requires "fault-free execution", but he warns this might not be possible. He still regards the group as a "superb example of disruptive innovation" which is "imaginatively led and executing well" but its valuation just seems "too rich".
The shares have had a stellar performance. Last year they flew up more than 75 percent and it is certainly a top performer considering their float price of 20p on AIM in 2001. Its founders have made millions. Last year chief executive and co-founder Nick Robertson cashed in 750,000 shares at pounds sterling 21.50 each, making a tidy pounds sterling 16 million.
Reynolds retains his share price target of 2199p and the shares lost 37p to 2660p.
Yesterday Citigroup analyst Simon Weeden said a takeover of telecoms giant Vodafone by United States joint venture partner Verizon was "no longer as outlandish as it once seemed" and today reports emerged that the boss of Verizon said a purchase of Vodafone's 45 percent of Verizon Wireless is "feasible". Does Vodafone want to sell Traders aren't sure but the stock made a 3.95p gain to 163.6p to take the top spot on the benchmark index.
Investec's banking guru Ian Gordon has turned less keen on HSBC, reducing his rating from buy to hold. He raised his share target price to 685p but thinks the bank has too much capital and argues that "until investors can see how and when the 'freed-up capital' can be deployed or returned, further upside appears much more limited". The shares dipped 4.4p to 661.9p.
The broader top-flight index saw buyers return to the market after a sell-off yesterday and the FTSE 100 index added 4.11 points to 6068.69.
On the mid-cap index, gaming software developer Playtech got a boost from analysts at Daniel Stewart, who reiterated their buy recommendation for the stock and gave it a share price target of 505p. The shares won a 3.3p gain to 433p.
Back on AIM, Nautilus Minerals, the underwater precious metals miner, said it had received an approach from investor Michael Bailey. The group said it had not had any contact with the potential bidder but the shares jumped 60 percent, adding 17.25p to 46p.
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