Home Retail shares recoup as gardening bid talk grows

<p>For Home Retail Group, bid talk has trumped Black Friday blues.   The Argos owner’s shares ebbed further on Cyber Monday, after a lacklustre showing […]</p>

For Home Retail Group, bid talk has trumped Black Friday blues.

 

The Argos owner’s shares ebbed further on Cyber Monday, after a lacklustre showing on Friday’s sales.

They were also hampered by reports—which Home Retail denied—that its website barely coped with the much bigger than expected online shop seen over the weekend.

Either way, it hasn’t been a great sign for a firm pinning hopes for the catalogue business to pivot online strongly enough to challenge Amazon.

Late on Monday though, the press came back for another bite of a recent story about private equity-backed interest.

The FTSE 250-listed shares rose almost 9% on Tuesday, reacting to an FT report that said a former garden centre exec was looking into a possible approach.

To be clear, naturally Nicholas Marshall’s interest was held to be in Home Retail’s DIY store (and gardening outlet) Homebase, not Argos.

However, Home Retail’s profit warning in October was pretty much down to disappointing Argos performance rather than let-downs at Homebase stores.

 

And as we stated earlier this month, even if current speculation turns into something more concrete, the dream won’t come true before Christmas.

Were it not for persistent suggestions of private equity interest, HOME’s fall year-to-date would look even worse than it currently does, down 50%.

The reasons for that are above.

Froth aside, HOME’s charts concur.

The shares traded above their 21-day moving average (107p) on Tuesday, a moderately bullish signifier over the medium term, backed by support derived from recent highs.

However, a falling line in place since November 2014 turned into resistance during HOME’s October sell-off and on balance, speculative buying may not have enough traction yet to overcome it.

 

HOME RETAIL DAILY POST MORE BID SPEC 1ST DECEMBER 2015

Please click to enlarge

 

 

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.