Poundland (PLND) 342p

Gain to date: 1.7%

Original entry price: 336.38p (15 May ‘14)

Our bullish call on general merchandise discounter Poundland (PLND) suffered a short-term setback on news (21 Jan) third quarter growth slowed due to later-than-anticipated new store openings. Nonetheless, we are sticking with our positive stance on the single price retailer. Sales (excluding Spain) grew 9.8% to £328.4 million buoyed by record Christmas business.

Expansion in the UK and Ireland continues, with cash-generative Poundland boasting a very strong, high-quality new store pipeline.

Poundland’s rating is high at 25.5 times forecast earnings of 13.4p, yet its strong growth prospects in Europe’s structurally-attractive discount sector more than merit a premium valuation.