Two years ago, the fashion retailer JD Sports showed all the signs of being a high quality business that was growing popular with investors. In a competitive market, it was carving out a niche for selling activewear at premium prices. The only catch was that its share price was starting to look as premium as its products.
Since then, JD’s high quality and relentless momentum have propelled its shares by an impressive 250%. But only with the benefit of hindsight could you say that JD was ever a bargain in recent years.
This investment profile belongs to a group of companies in the stock market known as High Flyers. They are companies capable of compounding strong returns over many years – but you have to pay up for the privilege of owning them.
A case of style and substance
A key feature of High Flyers is their financial and franchise quality. Often they have strong brands or services that customers love. JD’s business model has deliberately left the “stack ‘em high, sell ‘em cheap” model to competitors like Sports Direct. By focusing on well designed, appealing stores, it’s attracted the best ranges from higher-end brands.
That…
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