Up 35% in 5 weeks: Why the Breville Group Ltd share price could keep climbing

The last five weeks have been full of ups and downs for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), but it still managed to carve out an almost 2% gain during the period.

Whilst the index fought hard for this small gain, one share in particular didn’t have to do much fighting at all. During the same period this share managed to climb a massive 35% and I believe it could still climb even further from here.

The company which I am talking about today is Australian kitchen appliance manufacturer Breville Group Ltd (ASX: BRG).

The catalyst for the share price increase was its strong half-year report. The company reported a 12.7% increase in revenue to $331 million compared to the previous year, and bottom line growth of 4% to $31 million.

Although these results were not earth-shattering, the company had suffered from a sell-off in the weeks leading up to the earnings report. Clearly the better-than-expected report has helped lift the share price.

Despite the 35% climb in the share price in the last five weeks, its shares are still only up around 4% for the year. I believe that thanks to the housing boom there is plenty more upside left for investors to profit from.

Just like Harvey Norman Holdings Limited (ASX: HVN), Nick Scali Limited (ASX: NCK), and Fantastic Holdings Limited (ASX: FAN), I believe Breville will benefit from the strong demand for furnishings that the housing boom has created.

Its kitchen appliances are high quality and distributed far and wide through retailers such as David Jones and Myer Holdings Ltd (ASX: MYR).

The company’s exposure to the United States is another key reason why I expect it to perform well this year. In its half-year results the North American segment produced an increase in both revenue and earnings of 30.8% and 39.9%, respectively.

With many saying the Australian dollar could be on its way down to US 65 cents later this year, there is a strong chance Breville could report bumper earnings in its full year report thanks to its North American segment.

Even though its share price has risen rapidly, it is still almost 5% off its 52-week high. With analysts expecting earnings to grow by 9% per annum through to 2018 (according to CommSec), I believe there is every chance the shares will set a new 52-week high in the next 12 months.

With all the stars potentially aligning for Breville, I believe it is a compelling investment today.

Before you buy Breville Group, be sure to check out this amazing investment!

The Internet is About to Go "Six Feet Under"... And You CAN'T Afford to Miss What Comes Next

In-the-know investors are dancing on the Internet's grave--and gearing up to cash in on an even BIGGER tech industry. Australia--and the world--will NEVER be the same. Dollar for dollar, insiders are calling it one of the biggest new markets in the history of modern business... NOW is the time to get in on the hush-hush industry that could be poised for growth of over 4,463%+ by 2020... And the 1 ASX stock that stands to grow YOUR money right alongside it! Simply click here to learn its name.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.