Aim: Share price: 63.9p
Bid-offer spread: 63.1-64.9p
Market value: £47.3mn
- Earnings upgrades post third-quarter results
- Plan to reduce inventory and boost cash
- New customer acquisitions improving again
In chapter seven of The Intelligent Investor, the seminal 1949 work by Benjamin Graham, the father of value investing explains: "If we assume that it is the habit of the market to overvalue common stocks that have been showing excellent growth or are glamorous for some other reason, it is logical to expect that it will undervalue – relatively, at least – companies that are out of favour because of unsatisfactory developments of a temporary nature. This may be set down as a fundamental law of the stock market, and it suggests an investment approach that should be both conservative and promising." Graham's theory, as mentioned above, was that a strong balance sheet will usually see a company through any short-term difficulties and provide a "margin for safety".
Naked Wines (WINE), an online wine retailer with 792,000 subscription customers in the US, UK and Australia, offers exactly that and is a potentially lucrative recovery play, too, after the share price plunged more than 90 per cent from an all-time high of 914p in 2021.