BRBY (Burburry) offers reasonable value
BRBY, in case you didn’t know, is a luxury clothes manufacturer. They are well known for their trench coats, and they have retail stores at various locations. BRBY is much-beloved by the Chinese. Understandably, Chinese economic woes have cast a shadow on BRBY.
BRBY is a favourite of Nick Train although it isn’t in the top 10 holdings. I do not know Terry Smith’s view on it. BRBY has excellent returns on capital, operating and gross profit margins.
Train’s bull case is that BRBY has been known for many many decades by the Chinese, and he expects that to continue into the future. He looks past the short-term woes, into future decades.
I had a look on Stockopedia, and I notice that their trailing EV/EBITA is 5.5. That’s value territory, especially given how solid a company BRBY is.
A note of caution is that analysts estimate 2024 net profit to be £287m, down from £490m on a TTM (trailing twelve month) basis. 2025 is expected to be about flat.
BRBY shares stood at over 2500p in March 2023, and have since fallen by about half. Shares are 1213p, near a decade low.
I don’t own shares in BRBY, nor do I intend to, as I think there are more interesting opportunities elsewhere. Still, I view BRBY shares as offering good value.
1213p. ASX 4338