EBTM - 4.875p

We featured EBTM six months ago and noted that they were a speculative buy, given that the shares are risky but with significant upside potential if the company gets things right.

The price at that time was 5.25p, slightly higher than the current level. For those who missed our last coverage, EBTM is an online retailer of music inspired fashion'.

Christmas trading was far from spectacular and this saw the share price tumble to 2p at the start of February.

Since then there has been better news coming through and it seems that the broader reasoning behind us highlighting EBTM remains intact.

Online sales in general continue to rise and EBTM undoubtedly operates in a growth market and should be rated accordingly.

On a micro level the year ended April 30, 2008 finished well and it is anticipated that a maiden profit before tax will be reported for this period. The company released a statement on April 30 and appears upbeat about prospects for the future.

It remains cautious about its wholesale business due to the state of the High Street in the UK but the forward order book for delivery in Autumn 2008 looks good and there is good growth in mainland Europe.

In addition, ASOS, which is another online retailer listed on AIM, has seen its share price continue to strengthen.

At the time of writing the ASOS share price stood at the 290p level, giving a market capitalisation of over £212 million compared to EBTM's £12 million.

EBTM is at a much earlier stage of development than ASOS, but appears to be following a similar business plan and this should prove to be a good strategy.

One area of improvement for EBTM is the fact that there is an increasing proportion of own brand products within the online sales mix. This ensures greater margins and should boost profits.

In summary, EBTM shares are not for the risk-averse. At the end of the day the company is in the early stages of its development as a retailer.

There could be a number of pitfalls ahead, particularly if the economic outlook does not improve.

However, it is not all doom and gloom and those looking for an interesting punt could potentially see spectacular returns if things do go to plan.

On that basis, we retain our speculative buy rating and as recent share price performance has shown, patience may be required.

WARNING: Opinions expressed are the writers' judgments at the time of writing. The information does not constitute a personal recommendation and readers should seek their own professional advice as to the suitability of the investments.