Sell: Rosetta Stone (RST)
From Ian Wyatt’s Million Dollar Portfolio
Updated from Wall Street’s Best Investments 762, October 22, 2014
Rosetta Stone (RST) was a turnaround situation when I entered the position in 2014.
At the time, the company was losing lots of money. It was in the early stages of a transition from a DVD and retail operation to an online subscription model. That transition has taken over three years. But it’s finally bearing fruit.
During the last three years, revenues have dropped from $218 million to $185 million. Even with the decline in sales, Rosetta Stone has turned around its bottom line. The company reported a net loss of nearly $47 million in 2015. By last year, that loss had shrunk to just $1.5 million.
Our patience has been rewarded. The stock is now up 84% in the portfolio. That compares with a 37% gain for the S&P 500 since September 2014.
Shares look fully valued at a recent price above $13. I’m going to lock in our profits at this level.
Ian Wyatt, Ian Wyatt’s Million Dollar Portfolio, www.wyattresearch.com, April 20, 2018