Published on 10th December 2014
When something seems too good to be true, it probably is. Shares of on-line fashion retailer Asos are trading at a price-to-earnings ratio of 54.3 versus a rating of between 30-35 times profits for well-established and successful technology firms such as ARM Holdings. Furthermore, while the company has maintained its growth target for sales next year at between 15% to 20%, that masks what should be an easy fourth quarter due to the fire at its depot at Barnsley this year. Then there is the no small matter of its accounting treatment for the insurance pay-out it received for the above incident. Simply put, it puzzled several analysts. On top of that, one should carefully ponder the implications of the slowdown seen in the firm's international sales. The shares are best avoided, writes The Times's Tempus.