No Pain, No Gain: The rules of gravity always apply, what goes up...

A great many shares soar into the stratosphere – only to crash to earth as reality checks in. With hindsight, it is clear that Myhome International, the franchise group that is a constituent of the No Pain, No Gain portfolio, was well ahead of the game when it hit 106p last year.

Last week, the residential cleaning-to-car-valeting company was down to a miserable 14p. Following my comments, the price moved to 29p. It is now around 23p.

A number of former constituents, such as Prezzo and Goals Soccer Centres, have also failed to retain glamour ratings. But not all high-flyers surrender their glory. Asos, the internet retailer, is a classic example of a wonder stock that is still going strong.

Its AIM-traded shares recently topped 300p compared with the forlorn 4p or so where they resided five years ago. The price, as I write, is 273p.

A host of City analysts think the shares will continue to romp ahead. Their confidence is underpinned by the company's impressive trading performance. In the 12 months to March last year, pre-tax profit rose 144 per cent to £3.4m with sales 116 per cent higher at £42.6m. For good measure, it had £5.4m sitting in the bank. Back in 2003, the company (then called AsSeenonScreen) was making exceedingly confident noises about prospects but its pre-tax loss increased from £1.1m to £1.7m; figures, it could be argued, that justified that down-in-the-dumps 4p share price.

But that was the nadir of the group's fortunes. It soon swung into the black. And, for the year just ended, it has posted an encouraging trading bulletin. With sales reaching £81m, it indicated that profits would beat stock-market expectations. So, expect a figure around the £7m mark, struck after a £1.1m one-off charge.

For the current year, another profit explosion is likely. Indeed, stockbrokers seem to be queuing up to lavish praise and produce heady forecasts.

That is not always a good sign, although in Asos's case it could be unwise to argue against the chorus of praise. As a relatively small company (capitalised at nearly £200m), the internet player has already won the attention of many small-cap stockbrokers. But last week it collected a heavyweight admirer – none other than the blue-blooded and powerful institution of Cazenove.

It reckons the group's ability to convert sales into cash should make the shares worth 387p. I think Caz is the most optimistic of the fortune-tellers. For example, the much smaller Daniel Stewart has a 350p target. With profits of £11.1m being talked about for this year – and don't forget retailers are having a tough time – there must be a chance Caz is being too adventurous.

I last commented on the group in 2004. I was then thinking of adding the shares to the portfolio. Unfortunately, Asos is a runaway success that escaped. The shares had, in almost a straight line, then climbed from 4p to 30p. So I suggested would-be investors should wait for the excitement to abate a little. Although the shares have since suffered inevitable hiccups, anyone who ignored my advice is sitting pretty.

The group has been trading for eight years. It came to the stock market when the madcap internet surge had already evaporated. At first it concentrated on fashionable womenswear that appealed particularly to internet-savvy 16- to 34-year-olds. But it has since widened its range and now embraces such areas as menswear and jewellery. After an indifferent start, online shopping is taking an increasing share of the retail market. Asos has 1.8 million registered customers, and it seems set to log on many more.

Still, I have decided not to recruit the shares to the portfolio, at this point anyway. It is a decision I may well (again) regret, although they are on a sky-high rating that could be too rich for these turbulent times. But after so sadly missing the boat in 2004, I would not try to dissuade any investors who are prepared to climb on board.

There is always, of course, the chance of takeover activity. Asos must be looking particularly attractive to hard-pressed high-street fashion chains feeling the recessionary pinch.

I would, therefore, not be surprised to see it engulfed in corporate action. The impressive profit record should ensure a premium bid.

Compare with the Independent: See how much you could save by switching credit cards. Compare now

Arts & Entertainment
The Honesty Policy is a group of anonymous Muslims who believe that the community needs a space to express itself without shame or judgement
music
News
Waitrose will be bringing in more manned tills
newsOverheard in Waitrose: documenting the chatter in 'Britain's poshest supermarket'
Life & Style
life
News
Who makes you happy?
happy listSend your nominations now for the Independent on Sunday Happy List
VIDEO
Arts & Entertainment
Ian Anderson, the leader of British rock band Jethro Tull, (right) and British guitar player Martin Barre (left) perform on stage
musicJethro Tull frontman leads ‘prog rock’ revival
Arts & Entertainment
Back in the suit: There are only so many variations you can spin on the lives or adventures of Peter Parker
filmReview: Almost every sequence and set-up in The Amazing Spider-Man 2 seems familiar from some earlier superhero film
Arts & Entertainment
Jack Gleeson as Joffrey Baratheon in Game of Thrones
tv
Life & Style
Father and son: Michael Williams with son Edmund
lifeAs his son’s bar mitzvah approaches, CofE-raised Michael Williams describes the unexpected joys he’s experienced in learning about his family’s other faith
Sport
Gareth Bale dribbled from inside his own half and finished calmly late in the final to hand Real a 2-1 win at the Mestalla in Valencia
sport
Arts & Entertainment
Who laughs lass: Jenny Collier on stage
comedy... writes Jenny Collier, the comedian whose recent show was cancelled because there were 'too many women' on the bill
News
House proud: keeping up with the Joneses now extends to children's playhouses
newsLuxury playhouses now on the market for as much as £800
News
news
Life & Style
Stir it up: the writer gets a lichen masterclass from executive chef Vivek Singh of the Cinnamon restaurants
food + drinkLichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines
Extras
indybest
Arts & Entertainment
Ken Loach (left) and Mike Leigh who will be going head to head for one of cinema's most coveted prizes at this year's Cannes Film Festival
filmKen Loach and Mike Leigh to fight it out for the Palme d'Or
News
The academic, Annamaria Testa, has set out on her website a list of 300 English words that she says Italians ought to stop using
newsAcademic speaks out against 'Italianglo' - the use of English words in Italian language
Finacial products from our partners
Property search
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    1st Line Helpdesk Engineer Apprentice

    £150.00 per week: QA Apprenticeships: This company has been providing on site ...

    Telesales & Sales Support Apprentice

    £221.25 per week: QA Apprenticeships: This company is a well established Inter...

    Client Relationship Manager - SQL, Python

    £40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...

    **Financial Services Tax**

    £35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...

    Day In a Page

    How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

    How I brokered a peace deal with Robert Mugabe

    Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
    Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

    British Muslims's Happy video attacked as 'sinful'

    The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
    Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

    Michael Williams: Do as I do, not as I pray

    Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
    A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

    A History of the First World War in 100 moments

    A visit to the Front Line by the Prime Minister's wife
    Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

    Jenny Collier: 'Sexism on stand-up circuit should be extinct'

    The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
    Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

    Cannes Film Festival

    Ken Loach and Mike Leigh to fight it out for the Palme d'Or
    The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

    The concept album makes surprise top ten return

    Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
    Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

    Lichen is surprise new ingredient on fine-dining menus

    Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
    10 best baking books

    10 best baking books

    Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
    Jury still out on Manchester City boss Manuel Pellegrini

    Jury still out on Pellegrini

    Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
    Ben Stokes: 'Punching lockers isn't way forward'

    Ben Stokes: 'Punching lockers isn't way forward'

    The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
    Mark Johnston: First £1 million jackpot spurs him on

    Mark Johnston: First £1 million jackpot spurs him on

    The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
    Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

    Ricky Gervais: 'People are waiting for me to fail'

    As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
    Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

    Mad Men returns for a final fling

    The suits are still sharp, but Don Draper has lost his edge
    Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

    Google finds a lift into space will never get off the ground

    Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit