KEY POINTS
OVERALL MARKET
The stock market indices recovered from the recent dips.
All the market indices reversed direction and finished nicely in the green.
It seems investors were buying the dip of the last few days as the COVID variant hasn't gone anywhere. The economic indicator that may have helped the market is a more than 6% jump in the US Housing Starts, compared to 2.11% last month. This is higher than the long-term average of 0.34%. It may have been a signal to investors that the economy is still chugging along. WHAT'S UP
At a 0.3 price-to-sales ratio, Bed, Bath and Beyond (BBBY) could be a cigar butt stock.
Today's winner stock of the day reminds me of the cigar butt term. Cigar butt, as some of you may know, is the name that value investors give to a company that may have one last poke left before it is totally run out.
That company is Bed, Bath and Beyond (BBBY). Today, the stock was up more than 7% today after the news that it has started a partnership with Casper (CSPR) to sell mattresses and create an in-store experience for Casper customers. Now, why is it a cigar butt? Let's head to the stock's fair share price and valuation multiples on its Stock Card. At 0.3 times price to sales ratio, investors expect the stock to be worth one-third of its current sales value. Let's look at BBBY's performance in the last year. If we ignore the comparable sales between 2020 and 2021, due to store shut-downs in 2020, the company's same-store sales were up 3% in 2021 Q1 vs. the same time in 2019. It's also taking a page out of Target's (TGT) playbook and has launched a few store brands to boost its margin. So, the company can grow its sales and is certainly worth more than ⅓ of its current sales. Let's go to the cash availability section on Stock Card, and it is a free cash flow generating company. So, I'm not saying BBBY is the next Tesla (TSLA), but the current valuation doesn't seem to be jiving with its performance. There is so much to hate about Bed, Bath, and Beyond, including its store experience and appetite to buy back shares, but if I were a cigar butt investor, I would have taken one last poke. GET THE MARKET RECAP
Did you know you can get your Daily Market recap report on YouTube, listen to it on our Podcast, or get it in your inbox?
Watch it, Listen to it, Or, read it. Sign up for a free Stock Card account to get the report in your mailbox every day. WHAT'S DOWN
If Netflix's (NFLX) new bet on gaming pays off, the stock is a good bet at the current price.
Shares of Netflix (NFLX) were flat today after the company missed earnings expectations. Interestingly, the company still managed to add almost 2 million new global subscribers.
The company confirmed that it is entering into gaming, as it sees video games as a new kind of content. One way to interpret this is Netflix hitting its ceiling and feeling the pain of competitors such as The Walt Disney (DIS) and Disney+. This is the first interpretation I had when I heard about gaming aspirations a few days ago. However, another way to interpret this is as a sign of business evolution and applaud Netflix for racing to new content segments. On Netflix's Stock Card, I can see that using the 5-year price-to-earnings ratio, 3-year price-to-sales ratio, and average analyst target, the stock is undervalued or fairly priced. So, it's not a bad idea to consider buying some shares to see what would happen to Netflix's new bets. STOCK CARD TIP
Have you seen the Portfolio Update section?
Today, when I logged in to my dashboard on Stock Card, I noticed four of the portfolios I follow on Stock Card have at least one new update. Not sure if you have seen, but if you follow any portfolio on the Stock Picks page, you will get updates in your inbox and your feed when you go to your dashboard page on Stock Card.
Just locate the feed in the bottom-middle of the dashboard page and click on Portfolio updates. GET THE DAILY MARKET RECAPComments are closed.
|
Archives
July 2022
Categories
All
|
RSS Feed