Is Halfords Group plc More Likely To Beat The Stock Market Than Tesco PLC, J Sainsbury plc, WM Morrison Supermarkets PLC And Sports Direct International Plc After Today’s Update?

Is Halfords Group plc (LON:HFD) (LSE:HFD.L) a more appealing investment than Tesco PLC (LON:TSCO) (LSE:TSCO.L), J Sainsbury plc (LON:SBRY) (LSE:SBRY.L), WM Morrison Supermarkets PLC (LON:MRW) (LSE:MRW.L) and Sports Direct International Plc (LON:SPD) (LSE:SPD.L)?

Halfords Group plc
Halfords Group plc

Halfords Group plc (LON:HFD) (LSE:HFD.L) has released an update to the stock market today. It is for the 15 week period to 13 January 2017. Group revenue has risen by 11.4%, with Retail LFL up 7% and Autocentres LFL down 0.6%. Growth in Retail categories has been due to the continued execution of the ‘Moving up a Gear’ strategy, with promotional activity helping gross margin to be in line with expectations.

The company’s share price could benefit from strong service-related sales growth of 13.7% and group online LFL sales growth of 16.3%. This improves the appeal of Halfords as an investment in my opinion, with there being no change to its expectation of group pretax profit for the current financial year.

Investors could also become more bullish about the company’s continued growth in fitting services alongside strong performance in batteries, dashcams and child seats within the Motoring division. In the company’s Cycling division, sales growth in both bikes and PACs was aided by new ranges, which continued to grow strongly. In Autocentres, the customer proposition was improved by longer opening hours and new technician pay grading.

Shares in Halfords have risen by 6% in the last month. That’s ahead of fellow retail shares such as Tesco PLC (LON:TSCO) (LSE:TSCO.L), J Sainsbury plc (LON:SBRY) (LSE:SBRY.L), WM Morrison Supermarkets PLC (LON:MRW) (LSE:MRW.L) and Sports Direct International Plc (LON:SPD) (LSE:SPD.L). Tesco’s shares are up 0.5%, Sports Direct’s stock is up 4%, Sainsbury’s stock has risen by 5.5% and shares of Morrisons are up 5.5%.

In my view, Halfords has investment appeal in the long run. I feel investors may become more uncertain about its near term performance due in part to the risks associated with Brexit. Therefore, it’s not a stock I’m looking to trade via a CFD or spread betting trading account. However, I also feel in the long run Halfords will perform well versus the wider stock market and therefore could be a good investment on a relative basis.

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