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Here’s why Super Retail Group Ltd soared 5.4% today

It’s been a rough day for investors with the Australian stock market continuing its plunge downwards, but shareholders of Super Retail Group Ltd (ASX: SUL) will be pleased with how their shares have performed.

The stock rose as much as 5.8% earlier in the day to trade as high as $8.17. While shares have since settled back to $7.85, they are still sitting on a nice 1.7% gain for the day.

While there was no specific news released by the company which would directly explain the jump in price, it is possible that a news release by Reject Shop Ltd (ASX: TRS) yesterday has prompted some buying. In a note to shareholders, The Reject Shop announced that sales had improved considerably over the last five weeks following a tough eight weeks to begin the new financial year. Shareholders of Super Retail Group could take this as a sign that Australian retail conditions are improving which would bode well for the company.

It is also possible that investors are simply seeing this as an opportunity to snap up a high quality company at a reasonable price. Super Retail Group’s shares have fallen more than 42% over the last 12 months and are now trading on a P/E ratio of 14.6x. While reasonable earnings growth is anticipated for the coming years, the stock also offers a nice 5.1% fully franked dividend yield.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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