LONDON -- This morning, iconic fashion retailer Burberry
How come? A 20% drop in the share price following a warning that current-year profits may come in around the lower end of City forecasts. You can read all the details here, but the bottom line is clear: Burberry has announced a sale -- and this time it's the company's shares, not its clothing, that have had the price slashed.
Falling knife -- or bargain? Many investors will have looked at the company's healthy cash position and strong brand and seen a situation analogous to the similar announcement by Tesco in January: a strong business temporarily battling headwinds. For investors who find a price-to-earnings ratio of more than 20 too rich and a yield of just 1.7% too low, today obviously marked a buying opportunity.
Up next is mining giant Vedanta Resources
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Investing ideas from Malcolm Wheatley:
Malcolm has no disclosable interest in any of the shares listed. The Motley Fool owns shares in Tesco. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
Disclaimer: The TD Direct Investing (www.tddirectinvesting.co.uk) list of Top Ten Buys should not be taken as a recommendation to buy or sell any particular bond or stock, and is not intended as any form of advice. Instead, it is simply an indication of the general buying trends among TD Direct Investing customers during the period stated.