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Vultures can do very well capitalizing on the difficulties of others. That is the case with Overstock (NASDAQ: OSTK).
The company buys excess inventory from struggling brick and mortar retailers and sells the goods online. By passing savings on to the customer, OSTK is positioned to beat the pants off the competition.
In the wake of the dot-com crash, short sellers pummeled this stock without any regard for its real business prospects. Those prospects have only improved in the time since.
Even though revenue for the company decreased by 8% in Q1, OSTK beat earnings estimates this week by 11 cents per share. The company has a strong balance sheet with more than $3.45 per share of cash and minimal debt. With the stock trading for 3.6 times cash, I rate the stock a buy.
Next: Online retail stock #3.
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Reader Comments (Page 1 of 1)
4-27-2009 @ 7:04AM
Dan Barnett said...
Other writers for this site think that buying OVSK is God's way of telling you that you have too much money.