It's been a good month for Lovisa shareholders, with Lovisa shares clocking their best month in quite some time.
At the time of writing, Lovisa Holdings Ltd (ASX: LOV) is trading hands at $25.78. That means those who invested $5,000 on the April 7 dip have already turned that investment into $6,150.
Yesterday, the Australian Financial Review reported that the efforts of opportunistic retail investors who bought last month had paid off.
While US-listed shares and US-focused ETFs have been the most popular trades, several ASX shares have also been very lucrative opportunities for those who bought during the recent dip.
Among the best-performing trades were Boss Resources Ltd (ASX: BOE), Eagers Automotive (ASX: APE), NextDC Ltd (ASX: NXT), and Pro Medicus Ltd (ASX: PME). These companies have surged between 25% and 86% since 7 April.
However, Lovisa is not far behind them, having risen 23% over that time frame.
By comparison, the S&P/ASX 200 Index (ASX: XJO) is up 11% over that period.
Why has Lovisa outperformed the index over the past month by such a significant margin?
The Investment Case
Since its founding in 2010, Lovisa has been an impressive growth story. It operates 943 stores across Asia, Europe, and the US, with plans to add another 600 stores to its network over the next five years. Lovisa is a fast-fashion, affordable jewellery retailer that mainly caters to young women. Historically, Lovisa has performed well under various economic conditions despite selling highly discretionary products.
A tough year
Lovisa peaked at $38.29 in 2024. However, it has encountered a series of setbacks since then.
Most recently, Lovisa shares fell 6% in early April after Donald Trump's tariffs were announced. With its products primarily sourced from China and its dominant market being the US, Lovisa faces heightened uncertainty about future profitability.
On 7 April, Lovisa reached a 52-week low of $20.53. Investors who bought on this date have been well rewarded, with Lovisa shares up 23% since then.
Will the rebound continue?
There's good news for those still wanting to get on the Lovisa bandwagon.
In April, Macquarie named Lovisa its third-best pick in the retail sector, with a price target of $33.40. Therefore, according to Macquarie, Lovisa shares have further to run and remain undervalued. The popular retailer also offers a 2.8% dividend yield, which may be enticing for those looking for both passive income and capital growth.
