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Aston Martin Lagonda
What it does: Warwick-based Aston Martin Lagonda Global Holdings is a luxury car company.
By Paul Summers. Having fallen 96% since listing, surely the only way is up for Aston Martin Lagonda (LSE: AML) shares? As things stand, I’m not convinced. It could easily get worse for a company now on its fourth CEO in four years.
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My issue is not the beautiful cars; it’s the mountain of debt on its balance sheet. This is currently around the same as the value of the firm itself (£1.3bn). That’s hardly a solid foundation for a rip-roaring recovery. Then again, I’m not surprised. Aston Martin has gone bankrupt seven times before.
To be fair, the entire luxury sector is struggling. And at least the board has predicted that volumes and profits will rise in the second half of 2024. If this can continue into 2025 and beyond, I might change my opinion.
But right now, this is a punt stock and nothing more.
Paul Summers has no position in Aston Martin Lagonda Global Holdings.
Burberry
What it does: Burberry is one of the world’s biggest fashion houses with more than 450 retail outlets across the globe.
By Royston Wild. The Burberry (LSE:BRBY) share price has crumbled by around 50% in the past six months. The fashion giant’s now lost three-quarters of its value over the past year, and it’s tough to see how it breaks out of the downtrend that began in May 2023.
Investors were spooked by the firm’s failure to raise profits guidance back then. But things have gone from mildly concerning to outright alarming over time, its realignment to focus on the ultra-expensive end of the luxury goods market backfiring spectacularly.
Latest financials showed sales down 22% in the three months to June. So Burberry’s hoping the appointment of Joshua Schulman as new chief executive in July will spark a recovery. Schulman’s an industry veteran with successful stints at the likes of Jimmy Choo and Michael Kors, so that experience could prove extremely fruitful for the business.
It may prove a masterstroke. However, turning Burberry round is a tough job, as the merry-go-round of CEOs in recent times has proved. And Schulman’s task is especially difficult against the backdrop a struggling luxury sector.
I can see the FTSE 100 firm continuing to struggle.
Royston Wild does not own shares in Burberry.
Dowlais Group
What it does: Dowlais is a group of automotive engineering businesses focused on the transition to sustainable vehicles.
By Mark David Hartley. To say Dowlais Group (LSE: DWL) has had a bad year would be an understatement. It only went public just over a year ago and already the shares are down 50%. The company was formed in 2023 as a demerger of two companies from aerospace manufacturer Melrose Industries. It operates as a collection of engineering businesses focused on sustainable vehicles. With the market for sustainable vehicles expected to grow significantly, the company is well-positioned to benefit.
Despite bringing in £1.14bn in revenue last year, it posted a £50.5m loss, with earnings per shares (EPS) at -4p. However, such losses aren’t that uncommon for newly-listed companies. Sales-wise, it seems to be doing well, with a price-to-sales (P/S) ratio of 0.16. I think the shares could still fall further but with a 9.78% dividend yield, the low price seems a great opportunity to grab them while cheap.
Mark David Hartley does not own shares in any companies mentioned.
Ocado Group
What it does: Ocado Group is a grocery retailer, e-commerce and logistics business with a presence in 12 countries.
By James Beard. With its share price plummeting 70% since September 2019, I think Ocado Group (LSE:OCDO) qualifies as a FTSE flop.
Its favourite measure of profitability is EBITDA (earnings before interest, tax, depreciation and amortisation) which was £51.6m during the year ended 3 December 2023 (FY23). But it’s borrowed heavily to invest in its clever technology which will need replacing at some stage. This means its ‘I’ and ‘D’ are significant — its FY23 pre-tax loss was £393.6m.
Presently, its joint venture with Marks & Spencer accounts for approximately 70% of revenue.
But Ocado describes itself as a technology business and sees a path to profitability through licensing its platform to third parties and providing automated warehousing solutions and delivery services to others.
However, despite being around for 24 years, there’s no immediate prospect of the company moving into the black. For this reason, I wouldn’t touch the stock with a bargepole.
James Beard does not own shares in Ocado Group.
Vodafone
What it does: Vodafone is a multinational telecommunications giant. During the dotcom boom, it was the largest company in Europe by market capitalisation.
By Charlie Keough. Despite posting a gain this year, Vodafone (LSE: VOD) has been a terrible performer in recent times. In the last 12 months, its share price is down by 1.8%. In the last five years, the stock has lost a whopping 52.2% of its value.
While it may look cheap on paper, I think the stock could be a classic value trap. It’s one I’ll be avoiding adding to my portfolio anytime soon.
Its shares look on the expensive side. At the time of writing, they trade on 20.9 times earnings, comfortably above the FTSE 100 average of 11.
Granted, the business has been in transition, which I must take into consideration. And it has turnaround potential. As part of its streamlining mission, it has offloaded underperforming businesses to raise cash.
But I’m put off the large debt it has on its balance sheet. I think that could halt growth moving forward.
Charlie Keough does not own shares in Vodafone.
