This week, CMC Markets’ Michael McCarthy likes The Reject Shop (TRS). “TRS has a market capitalisation at around $64 million, and expects to make around $10 million profit this year from its 338 stores. That’s a downgrade from previous estimates closer to $18 million, and clearly some previous shareholders have panicked,” Michael says.
“Shares are trading around $2.20, down from highs above $8 this year. I’m currently looking for bricks and mortar retailers with a differentiated strategy, trading at share prices that I regard as good value. TRS fits the bill,” he concludes.
Chart 1: The Reject Shop