My First Share Purchase - Good or Bad?

TWR88

749 shares in DSGI (Dixons Group, owns PC WORLD, Currys) @ 64.50, a £500 investment. Need a second opinion, how do you rate this purchase? The share price has been falling for months from around 170 12 months ago. But things seem to be on the up. As I see it things can get much worse, and fingers crossed the chances of an established company like this going into liquidation is pretty low. So as a long term investment (12 months+) should be okay? At some point in the future things are going to get a lot better for the company no?

Bazn

possibly

but then i would say chances of bankrupcy are low but definitely present... Northern Rock was pretty established too! and 12 months is certainly not long term!

amcluesent

Hmm, I can't recall anything in Curry/PC World is essential for the millions now waking up to skyrocketing mortgage payments and -tive equity.

TWR88

Less of the sarcasm, although I see your point. Only today I've made enough so if I sold all my stock I would cover the cost of my purcahse. I may sell some of it and invest it commodities as I've heard they're pretty good at the moment. My thinking with Dixons was things cant get much worse, so there are profits to be made! Maybe banks/energy companies are the way to go then...

Browntrout_2

Any single company share is a gamble.

You have bought shares in UK based speciality retailer, well known for everything from toasters to LCD flatscreens and immortalised by the Scottish TV Chewin the Fat sketch on extended warranty sales techniques!

You should buy up to 20 different companies shares in various sectors then you would have a portfolio.

As long as your portfolio meets or beats your benchmark target then it does not matter if one shares loses 10, 20% or 90% of it's value.

Hungerdunger

TWR88 wrote: »

Only today I've made enough so if I sold all my stock I would cover the cost of my purcahse. I may sell some of it and invest it commodities as I've heard they're pretty good at the moment.

Don't take offence, but you sound rather like someone who's gone to the bookies for the first time, won on several races and decided that you should now make your fortune on the horses.

I hope you're successful, but investing isn't all plain sailing.

debbie42

TWR88 wrote: »

I've made enough so if I sold all my stock I would cover the cost of my purcahse. I may sell some of it and invest it commodities as I've heard they're pretty good at the moment. My thinking with Dixons was things cant get much worse, so there are profits to be made! Maybe banks/energy companies are the way to go then...

The fact that a share has fallen significantly in price is no guarantee whatsoever that it is a "value share" and will inevitably recover and end up in profit. There is normally a reason why prices are so low. Marconi and Telewest spring to mind (somewhat painfully!)

Rather than buying shares on a vague hunch, you should do as much research into the particular share as you are comfortable with before investing.

DSGI is regularly discussed on the Motley Fool HYP board, if you are interested (registration needed, I think).

MoneyTown

The better internet retailers are eating into their profits all the time. I think it's a sell.

earlgrey_3

As you paid 64.50p then somone, probably a professional investor sold for about 63.5 and other professionals were willing to buy from them at a bit more. They can't both be right but both thought it a fair price. That's what the market is about.

Any share can go up and down. As pointed out they're losing out to smaller internet traders and now stores like Tescos with a huge number of regular shoppers are taking more of their non-internet trade selling tellies and white goods.

Worse still, Currys and PC World tend not to be much loved by their ex-customers who remember all those expensive extended warranties and poor service. Everyone knows that and is in the price. The gamble for you is whether they can turn that position around without wiley old Stanley Kalms who grew the business at the helm or if it will just fade slowly into the sunset taking your £500 with it. Could there be any value there for a takeover bid and by whom? Some might say it can't get much worse, it could get better. It might make you rich, or not.

swiss69

The retail sector is likely to be hardest hit in the event of recession as people start to tighten their belts.

I tend to buy shares that are peaking if I feel that their sector is strong as they can continue with their good run. Predicting when a share has bottomed out is very difficult. Hbos was a fantastic buying opportunity last week though...

purch

At some point in the future things are going to get a lot better for the company no?

Not Necessarily.

Not the sort of Stock I'd be interested in.

Market share continually being eroded....prices/margin continually being eroded....brand/image continually changing....all in all not the best position to be entering a possible downturn.

If the domestic economy enters a downturn, and if the 'Retail' sector as a whole is hit, this is one stock I wouldn't expect to fare too well.