Premier Investments Limited (ASX: PMV) is the company behind retail stores including Just Jeans, Portmans, Peter Alexander and Smiggle. Like its fellow specialty retailer Kathmandu Holdings Ltd (ASX: KMD) the company has reported a solid set of results. The profit results have impressed investors who have responded by sending the share price up 8% to within a whisker of its 52-week high.
The highlight of the result was the strong growth in earnings per share which grew 12.2% on the previous corresponding period. Other positives included growth in retail sales of 5.3% and a fully franked interim dividend of 20 cents per share.
Premier Investments also continues to maintain a robust balance sheet. The company has around $318 million of cash with just $77 million of debt and a holding in small appliance manufacturer Breville Group Ltd (ASX: BRG) which is currently worth $319 million. To top it off there are also $209 million of franking credits waiting to be distributed to shareholders.
Adding to the positive sentiment surrounding the interim results is a report in The Australian Financial Review focussing on speculation that Premier could be eyeing a takeover of David Jones Limited (ASX: DJS), which was recently outed for being approached by rival department store operator Myer Holdings Ltd (ASX: MYR) regarding a merger of equals.
With billionaire investor Solomon Lew at the helm of Premier, shareholders know they are in good hands. The combination of a rock-solid balance sheet with the fire power to make acquisitions, growing revenue and earnings within its own portfolio of businesses, and struggling competitors ripe for the picking makes for an appealing investment thesis. Despite the share price jumping higher, there would appear to still be good reasons to consider buying in at this point.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.
- 3 ASX stocks to buy now to get rich later – October 20, 2016 1:34pm
- Why this fund manager is worried about the sustainability of bank dividends – October 18, 2016 7:56am
- Here’s why I might buy these 2 beaten-up share bargains – October 17, 2016 4:18pm