The Share Centre keeps HMV as a buy despite poor sales

Nick Raynor, investment adviser at The Share Centre, explains that despite the first quarter sales slump at the HMV Group, it still remains a ‘buy' for investors.

"These results are largely attributable to the World Cup, which distracted potential customers from buying DVDs and books. This took place alongside a continued weak games market, which is showing no signs of improvement.

However the group, which is widening its product mix with live music and ticketing, has made significant changes to its stores and with a stronger product line up, particularly in games, it believes it can deliver successful Christmas trading levels.

"Despite these seemingly poor results, we believe HMV Group to be a high risk recovery play.  It has to compete with internet and supermarket rivals but it has a strong strategy in place that could result in a good Christmas.