Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online retailer Overstock.com (Nasdaq: OSTK ) has received the dreaded one-star ranking. Our data has shown that one-star stocks woefully lag the market average; conversely, five-star stocks outperform the S&P by a significant margin.
With that in mind, let's take a closer look at Overstock's business and see what CAPS investors are saying about the stock right now.
Overstock facts
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Headquarters (founded)
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Salt Lake City, Utah (1997)
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Market Cap
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$160.12 million
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Industry
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Internet Retail
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TTM Revenue
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$873 million
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Management
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CEO Dr. Patrick Byrne
CFO David Chidester
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Return on Capital (average last five years and TTM)
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(16.7%) and (16.9%)
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Competitors
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Amazon.com (Nasdaq: AMZN ) ,
eBay (Nasdaq: EBAY )
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CAPS members bearish on OSTK also bearish on
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General Motors (NYSE: GM ) ,
Ford Motor (NYSE: F )
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CAPS members bullish on OSTK also bullish on
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Google (Nasdaq: GOOG ) ,
Cisco Systems (Nasdaq: CSCO )
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Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.
Over on CAPS, fully 697 of the 993 members who have rated Overstock -- some 70% -- believe the stock will underperform the S&P 500 going forward. These Fools include stan8331 and CAPS All-Star TheHuney.
Two weeks ago, stan8331 looked at the stock from a consumer standpoint:
I've bought a few things from overstock.com in the past, but for an extended period now, every time I visit the website I see overpriced stuff I don't need. Amazon.com and Buy.com offer better deals and better consumer experiences - I can't see Overstock.com gaining any ground in the foreseeable future.
In a pitch just one day later, TheHuney shares that sentiment, providing some numbers to reinforce those bearish observations:
... they are operating at a loss, and have been cash flow negative over the past nine months. I've never known anyone who shops at their website and I can't imagine any potential buyers lining up to make an offer for this company. Throw in fuzzy accounting over the past several years and a potential SEC investigation and this thing seems like it might be toast to me.
What do you think about Overstock, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.
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