Buy Signal on H&M (HM.B-SE)

We had an Enter Long signal on November 17th 2020, triggered by our system on HM.B-SE, Hennes & Mauritz, the Swedish clothes retailer.

H&M is a SEK 287 Bn market cap, and specializes in designing and distributing clothes, accessories and cosmetics for men, women and children. The products are sold primarily under the H&M, H&M Home, COS, Monki, Weekday, Afound, & Other Stories and ARKET brands. Products are manufactured by subcontractors and marketed through a network of 5,076 points.

H&M recovery was better than expected in Q3 as more full price sales combined with strong cost control enabled the company to turn to profit. The company aims to accelerate transformation plans, from digital initiatives, the integration of the store and online channels, to store optimization efforts. Physical stores will nonetheless play a role – management stressed the importance of a physical presence for feedback from customers, enabling the H&M experience across different channels.

Short term catalyst: Transformation plan, end of covid crisis.

This signal looks consistent with the Bullish reversal in the European retail sector.