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Shares in the used car retailer accelerate on operations relaunch update
Thursday 28 May 2020 Author: James Crux


Gain to date: 13.2%

Original entry point: Buy at 190p, 14 May 2020

Our contrarian ‘buy’ call on Motorpoint (MOTR), based in part on a return to work tailwind, has delivered a quick-fire 13.2% gain, but we believe there is more to come from the used-car retailer’s shares.

Admittedly this is a higher-risk investment as visibility on earnings remains poor, although there is bumper upside potential once the economy clicks back into gear.

Shares in the nearly-new car seller revved higher last week on news that it had launched a contactless purchase process, with customers able to choose between free nationwide home delivery and contactless collection at any of Motorpoint’s 13 branches.

Shore Capital believes Motorpoint is currently ahead of the broader UK car market in recommencing its sales operations and is also pleased to see the same capabilities and click and collect option being applied to its website, which has also recommenced trading.

The broker expects Motorpoint’s recent investment in marketing capability to become evident with a new social media campaign planned.

Encouragingly the Government has now confirmed that car showrooms will be allowed to reopen from 1 June.

SHARES SAYS: The operations relaunch update was well-received and we’re pleased that car showrooms are now only days away from reopening. Keep buying.

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