By admin 
Image source: Getty Images
When I bought some, the predictions were for the boohoo (LSE: BOO) stock price was strong.
It turns out they were seriously wrong. But I think it was mainly due to problems that we really couldn’t see at the time. At least I haven’t seen them.
The experts
Once you’ve been stung, why worry about what the so-called experts think? I could say their assessment is as good as mine. And that would probably be true.
But we’re also looking at a company that’s making a loss, while the success of its turnaround plans is still up in the air. And in cases like this, it certainly pays to listen to all opinions before making a purchasing decision.
Oh, or sell of course. If I sell them now, I can probably buy a new pair of socks with the proceeds.
Hello, Mike
But what about the Mike Ashley and Frasers group drama? Frasers currently has a 27% stake in boohoo. And the company sent an open letter to the boohoo board on October 24.
It is summarized by: “Frasers requests that a general meeting of boohoo appoint Mr Mike Ashley as director and CEO of boohoo and Mr Mike Lennon as director of boohoo, so that this will take effect without delay. Frasers firmly believes that these appointments are in the best interests of Boohoo, its shareholders and stakeholders”.
The boohoo board doesn’t seem too keen on the idea. Ashley can be a divisive figure. But he has a decent track record when it comes to rescuing (some) companies in trouble.
If he gets his way, predictions may all need to be rewritten. But I think it’s worth revisiting to get a sense of the country’s lie.
No profit
The big red flag is a lack of gain for the coming years. Analysts still show negative earnings per share (EPS) until 2027. It seems like the losses will decrease by then. But at a time when I would say the competition is only going to increase, I’m not happy.
In terms of the share price, there is an average target of 32.5p. And the range goes from 18.5p to 70p.
With Boohoo shares trading at 29 cents at the time of writing, this upper limit suggests an attractive 140% gain. But is this enough to offset the risk of a 36% loss if the most bearish forecast is correct?
Either way, the wide range of opinions reinforces my belief that the experts don’t actually have much more sense than I do.
What to do
Despite my lack of excitement, I do see some intriguing possibilities. Is it worth buying with the idea that current management can pull boohoo back from the brink? If Ashley sees long-term value in the company, that’s a plus.
Or buy in the hope that Ashley will take the reins and steer the company to success? I really don’t know.
But I have decided one thing. There’s too much entertainment value for me to sell my meager share now. Besides, I have enough socks.