This morning we had a voluntary trading update from Mr Price. This company has set some high standards and again it has not disappointed. For the year ending 31 March 2012 they are expecting earnings per share to increase between 18 and 23%. It must be noted that this year for Mr Price is a 52 week year compared to the prior 53 week year. From a personal view I actually haven't bought an item from Mr Price in a while. Not because I don't like their products but more because the queues are always so long. A good sign of course.
Last year the company made R4.18 of earnings per share so we should be expecting around R5.05 this year if we take the middle of the range. The share price has been on tear now trading at R107. You could have bought them in February 2011 for R55.
The share price looks a lot more expensive than their merchandise, trading on a forward PE of 21. But are they really expensive? Clearly the company is growing fast and I believe they will manage to grow their earnings into their share price. I do believe however that most of the good news is already factored in and wouldn't be flying into the stock at these levels.