Back in early July this year I had a buy recommendation on the stock. The price was around $7.50.
Since then the price has moved up to $8.35 and the stock has paid a $0.28 fully franked dividend giving investors a gain of 16.5% over a six month period.
This little retail stock has outperformed the market and bucked the retail sales trend with sales growth of 7% at a time when most retails are experience negative sales growth.
It has achieved this through improving the in-store experience and having a good online presence.
ORL product line is aimed at the aspirational buyer. As such they have a very loyal following.
Although we are expecting and have already experienced a slowdown in consumption this has not translated across to a slow down at ORL.
The company is currently paying an 8.5% gross yield at the current price; they are proposing to continue a steady and conservative roll out of stores in Asia, which should underpin growth.
At $8.44 the price is a little above our valuation of $7.70. However, if you are a long-term investor with a focus on income, I would look to add ORL to your portfolio at these level or on any price weakness.
For more information on Oroton Group Limited (ORL) please contact us on 07 4771 4577.