NewTradingView.com – Investing and Stock News
Investing and Stock News
  • Investing
  • Stock
  • Economy
  • Editor’s Pick
Investing

Boohoo share price has become a penny stock. Is it a good buy?

by September 15, 2022
written by September 15, 2022

Boohoo (LON: BOO) share price has collapsed by more than 65% in 2022, making it one of the worst performing stocks in the FTSE 100 index. Other companies in the apparel industry like Next PLC and Asos have crashed by more than 30% from their highest levels this year.

Why is Boohoo crashing?

Boohoo is one of the biggest fast fashion companies in the UK. The company manufactures trending apparel and sells them through its websites and mobile applications. Unlike most companies that outsource their clothes from Asia, Boohoo’s main operations are in Leicester.

There are several reasons why BOO share price has been bleeding in the past few months. First, the origin of this sell-off was when a London newspaper wrote about working conditions in Leicester. The report led to an investigation by the UK government while the company appointed a special independent auditor to look at the issues.

To a large extent, Boohoo has come up with strategies to deal with these challenges. Indeed, recent reports suggest that the company has made improvements in its supply chains. However, the stock has not recovered.

Second, Boohoo share price has collapsed because of the ongoing impacts of higher inflation in the UK. Data published this week revealed that the country’s inflation eased slightly in August although it remains close to its highest point in more than three decades. As a result, many potential buyers have been forced to reduce their discretionary purchases, forcing many retail stocks to slip.

Indeed, Boohoo has reduced its forward guidance several times this year as its growth stalls. The same is happening internationally. On Wednesday, H&M said that its net sales grew by just 3% in Q3, lower than the median estimate of 5%. 

In addition, Boohoo is facing intense competition from the likes of Shein, the multi-billion dollar Chinese company that has become the biggest fast-fashion firm in the world.

Boohoo share price forecast

The daily chart shows that the BOO stock price has been in a strong sell-off in the past few months. In this period, the stock has crashed below the important 25-day and 50-day moving averages. It also dropped below the important support level at 51.35p, which was the lowest level on July 4. 

The stock has crashed below the downward trend shown in black. Therefore, the stock will likely continue falling as sellers target the next key support at 30p. This means that Boohoo has transitioned from a fast-growing company into a penny stock.

The post Boohoo share price has become a penny stock. Is it a good buy? appeared first on Invezz.

0 comment
0
FacebookTwitterPinterestEmail

previous post
Invest in the S&P 500 index? Biggest one-day % drop in two years
next post
Hilton Food Group share price nosedived after earnings. Is HFG a good buy?

You may also like

Disney Q1 earnings report: ‘this stock is unmatched...

February 9, 2023

Bank of America sees a 50% upside in...

February 8, 2023

Google stock loses 9.0% after it’s A.I event:...

February 8, 2023

Ex-Coinbase manager pleads guilty to insider trading charges

February 8, 2023

U.K. CMA issues provisional decision on Microsoft-Activision deal

February 8, 2023

Nasdaq 100 forecast – can index continue to...

February 8, 2023

Jim Cramer is bullish on Uber stock after...

February 8, 2023

Summary of Powell’s remarks and what it means...

February 8, 2023

Best undervalued Bill Ackman stocks for 2023

February 8, 2023

What’s happening to Chipotle stock in extended hours?

February 7, 2023
Enter Your Information Below To Receive Free Trading Ideas, Latest News, And Articles.


Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Popular Posts

  • 1

    My Trigger to Enter $VAPR

  • 2

    Multi-Millionaire Trader Explains Why You Should Start Trading With A Small Account {VIDEO}

  • 3

    Scaling Up Tips From A 24-Year Old Millionaire Trader {VIDEO}

  • 4

    Pay Attention to These Stocks

  • 5

    New ‘Hunger Winter’ Looms as Europe Prepares to Shiver

Recent Posts

  • Disney Q1 earnings report: ‘this stock is unmatched anywhere else’

    February 9, 2023
  • Bank of America sees a 50% upside in this travel stock

    February 8, 2023
  • Google stock loses 9.0% after it’s A.I event: buy the dip?

    February 8, 2023
  • Ex-Coinbase manager pleads guilty to insider trading charges

    February 8, 2023
  • U.K. CMA issues provisional decision on Microsoft-Activision deal

    February 8, 2023

Categories

  • Economy (615)
  • Editor's Pick (235)
  • Investing (1,639)
  • Stock (9)
  • About Us
  • Email Whitelisting
  • Terms and Conditions
  • Privacy Policy
  • Contacts

Disclaimer: NewTradingView.com, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


Copyright © 2023 NewTradingView.com All Rights Reserved.


Back To Top
NewTradingView.com – Investing and Stock News
  • Investing
  • Stock
  • Economy
  • Editor’s Pick