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Dunelm - Follow directors lead and buy

March 2017

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • DNLM
  • Price:
  • 641p
Homewares retailer Dunelm had proved to be a reliable but not unexciting growth stock in the past but it has recently been hit by not only the weather but also underlying costs increasing due to investments in the supply chain, IT and transition costs relating to a second distribution centre in Stoke. These have impacted on margins. At the same time, since our last update note, it has also acquired the WS Group for £8.5m out of administration, which is expected to remain lossmaking until 2018 when it moves into profit. But I think the business is shaping up for an exciting future.WS consists of three brands; Worldstores (an online retailer of products for the home and garden) and Achicha (online store of highly discounted, fl ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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