Is ASOS now a better investment than Boohoo?

first_img Enter Your Email Address I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Andy Ross | Saturday, 25th July, 2020 | More on: ASC BOO Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! “This Stock Could Be Like Buying Amazon in 1997” Simply click below to discover how you can take advantage of this. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Andy Ross owns no share mentioned. The Motley Fool UK has recommended ASOS and boohoo group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.center_img Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Image source: Getty Images. Is ASOS now a better investment than Boohoo? Our 6 ‘Best Buys Now’ Shares The share price of Boohoo (LSE: BOO) fell off a cliff after revelations about factory conditions just a few weeks ago. Since then the company has had to defend itself, and directors have piled into the shares. This has helped reassure investors – a bit. Before that revelation, everything had been going so well. After the share price initially fell – along with nearly every share at the beginning of the pandemic – it had been rising sharply. This was driven by the realisation that everyone would shop online. The same trend that has seen Amazon’s share price also rocket. However, now the shares are under pressure once again. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Problems at BoohooThe problems at Boohoo are not simple to untangle. One point of view is that the shares are much cheaper now and scandals like this unusually blow over and are forgotten in time. Other UK companies have been involved in scandals that proved non-fatal, from accounting errors right through to corruption and bribery in developing nations.However, I think Boohoo’s recovery will be less smooth. It’s clear already there’s been no quick bounce back. Investors like Standard Life Aberdeen sold off Boohoo shares, which has put pressure on the share price. A rise in ESG investing is coinciding with this crisis. Another factor that is going to act as a drag on the share price in my view is the unusually close relationship between Boohoo’s co-founder and other family members with fast-fashion businesses. For example, back in May Boohoo completed its acquisition of PrettyLittleThing from the co-founder’s son. I can’t be alone in thinking this arrangement benefits the family more than ordinary shareholders.The acquisition followed criticism from a short-seller, Shadowfall, that raised questions over the amount of money Boohoo was likely to have to spend on buying out PLT’s shareholders.Opportunities for ASOSDo the issues at Boohoo create an opportunity for ASOS (LSE: ASC), which has faced its own struggles in recent years?I think it’s really too early to tell. Up until just recently Boohoo was clearly the better share to own. The big question – whether ethics will trump price in the key young adult market – remains to be seen. I expect I’m not alone in thinking price will win out in the end and fast-fashion will remain a highly profitable industry.Even if that’s the case, sales at ASOS don’t inspire confidence that it’s got all the answers or will be able to capitalise on Boohoo’s woes. Sales for the four months ending 30 June rose just 9% to £1.0bn. Given high street shops were shut, that doesn’t seem like a great performance. Compare that to a trading update from Boohoo before the supply chain crisis engulfed it and ASOS looks more lacklustre. In the three months to 31 May, Boohoo revenue increased by 45%.Right now I’m staying well clear of both shares. They are very expensive and Boohoo will come under increased scrutiny while ASOS still isn’t firing on all cylinders. See all posts by Andy Rosslast_img read more