By Malcolm Stacey | Tuesday 7 March 2017
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Hello Share Thrashers. In the past I’ve commended you to look at JD Wetherspoon (JDW). My reasoning was that average families, like mine, cannot do without it.
Cheap breakfasts, cheap booze, nice venues, usually hardly touching the magnificent buildings of a previous life, and fast, friendly service. Also, if you have students in the family, like me, you’ll find your offspring are never far from a Wetherspoon where they do their homework on free wi-fi.
But sometimes a firm which is great for consumers is not going to keep on making tasty profits. There are other factors out there - and they may not benefit this most excellent of pub/restaurant chains.
The last set of figures were good, beating City expectations. But that’s not everything. Firstly, the cost of food is going up. And unless Wetherspoon can source more of its nosh from Blighty, then the poorly pound will pull down on profits.
British GDP is strong now, but nearly all the experts say it will fall, as the Brexit honeymoon period wears off. I’m not sure it will decay, but in that, I’m against the flow.
If growth fails, so will profits and so will fun money in everyone’s pockets. This will mean less eating out. There is a boom in noshing in the street now, but that is mostly down to coffee shops, like Costa and Cafe Nero, where people can spend less and gossip more.
There is also the possibility that the novelty of Wetherspoons - big, cheap, cheerful, often noisy - might wear off. I sometimes yearn for a menu that’s a bit different, though they do do their best - especially for veggies like me.
Tom will read this and say "I told you so", as he has criticised my commendation for JDW in the past. However, regular readers will know he praises the firm’s big cheese to high heaven. Though, if I held the shares, I would consider selling them soon.
But not till I’ve sounded out opinion in the Punter’s Return.
Never miss a story.
This area of the ShareProphets.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ShareProphets.com. ShareProphets.com does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ShareProphets.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ShareProphets.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.
Comments are turned off for this article.
Search ShareProphets |
Stock market news |
Recent Comments |