Why the Premier Investments Share Price Rose Today

What happened to the Premier Investments share price?

Premier Investments Limited [ASX:PMV] is an Australian speciality realtor which operates several retail fashion chains across Australia, New Zealand and Singapore. PMV currently has seven retail brands: Jay Jays, Jacqui E, Peter Alexander, Just Jeans, Portmans, Dotti and Smiggle. Smiggle is a stationary brand and has stores in the UK.

At the time of writing, PMV shares were up 0.62% in Monday trade. The share price is currently trading at $15.65.

Why did PMV shares do this?

PMV’s stock has risen 10% in the past 12 months.

Premier Investments own many well-known brands in Australia, however these chain stores have reached maturity, and there isn’t much further growth potential in Australia for them.

The real reason behind the PMV share price rise over the past 12 months comes from international expansion of the Smiggle and Peter Alexander stores. Smiggle, in particular, is seen as a big driver of future growth.

It turns out parents are willing to spend big on flashy, shiny, and colourful stationary items for both ‘tween’ and under age brackets.

Smiggle products are all of those things.

Over the past two years, Premier Investments has rolled out Smiggle stores in Singapore, New Zealand and the UK. Over the next five years, PMV plans to have at least 200 Smiggle stores in the UK alone.

In March 2016, PMV shares soared to an all-time high of $17.63. This new peak came on the back of impressive first half results for PMV.

Net profit after tax was up 25.9%, to $71.5 million. Total sales rose 15.1%, to $565 million. The company announced a 23 cent dividend, up two cents on the prior period.

What now for PMV?

PMV has become a volatile stock since pushing past $10 per share in September 2014.

You’ll find PMV rises and falls depending on consumer sentiment and Australian retail trading results.

The volatility of this stock would suit short term traders.

However, the stock’s future growth relies heavily on international expansion. Any puttering in retail sales overseas — particularly in the UK — will hurt the company’s revenues.

Shae Russell,
Money Morning

Since starting out in the financial markets over a decade ago, Shae has extensive experience across various aspects of the industry. Shae cut her teeth in the derivatives industry, teaching clients basic trading techniques with technical analysis.

Joining Port Phillip Publishing eight years ago, Shae has worked across a number of publications, such as Australian Small-Cap Investigator, Gold Stock Trader and Microcap Trader. She’s spent the past two years however, honing her macro analysis skills alongside Jim Rickards, showing Australians how to invest and profit form global macro trends.

Drawing on her extensive experience, Shae is a contributor to Money Morning, and lead editor of sister-publication Markets & Money, where she looks at broad macro trends developing around the world, combining them with her distaste for central banks and irrational love of all things bullion.

Money Morning Australia