This e-commerce company was expected to lose $0.23 per share last quarter, but its EPS came in at $0.50.
Overstock.com, Inc. (OSTK)
From FMA Trader Alert
One of the most successful film franchises over the past decade or so has been “Fast and Furious.”
The high-testosterone, action-packed and auto-centered movies definitely deliver a lot of intense action in a two-hour period. And, while these films aren’t our respective cups of tea artistically (they’re short on intellectual depth), we do respect their commercial success, because it means they are appealing consistently to their target audience.
Now, in business, a strong and loyal customer base that results in strong sales and earnings is one fast-and-furious trend we like to identity when picking stocks in this service. But what we really like is when a company has multiple fast-and-furious trends pushing it higher.
This is the situation of late with e-commerce retailer and bitcoin play Overstock.com, Inc.
The retailer sells all sorts of products through its flagship website Overstock.com, but its business also includes its Medici Ventures division, and its tZERO and cryptocurrency investments. In fact, this year not only has the e-commerce segment thrived due to COVID-19, but OSTK’s cryptocurrency involvement has made it a good way to get exposure to bitcoin without buying bitcoin or its related exchange-traded fund (ETF) Grayscale Bitcoin Trust (BTC) (OTCMKTS:GBTC).
As for earnings, last month Overstock reported quarter-three earnings per share (EPS) that spiked 156% over the same quarter last year. Revenue also soared, up nearly 111% year over year.
Yet, when it comes to OSTK, the relative price strength is what we love, as the company’s remarkable rebound over the past 52 weeks of 775% (yes, you read that correctly) makes it one of the very best performers over the past year.
Interestingly, over the past three months, the shares are actually down some 45%. However, if we look at the shares since the November 10 lows, they have rebounded some 29%.
We suspect this latest breakout represents the next huge leg higher for OSTK, and as such we want to ride this fast-and-furious performer as it makes that climb back to new heights and beyond.
So, let’s buy Overstock.com, Inc. (NASDAQ:OSTK), at market, with a protective stop loss at $53.95.
For those willing to take a bigger bet, we recommend you buy the OSTK January $70 call options (OSTK210115C00070000) at market. The call options last traded for $8.30 and expire on January 15, 2021.
Mark Skousen & Jim Woods, FMA Trader Alert, markskousen.com, Eagle Financial, 300 New Jersey Ave. NW, Suite 500, Washington, D.C. 20001, November 23, 2020