Why Overstock.com, Inc. Stock Jumped

Is this meaningful? Or just another movement?

Jul 24, 2014 at 4:22PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Overstock.com, (NASDAQ:OSTK) were dazzling the market today, climbing as much as 20% after the company delivered strong sales growth in its second-quarter earnings report.

So what: The online retailer saw revenue increase 13% in the quarter, to $332.5 million, beating estimates at $315.2 million as orders and average ticket both increased. Despite the better-than-expected sales growth, bottom-line results weakened as profits fell from $0.15 a share to $0.08, worse than the consensus at $0.10, as marketing expenses grew 23%. CEO Patrick Byrne noted that it was the company's 10th-straight-profitable quarter, and credited increased technology spending for the improved performance. 

Now what: While the revenue growth was promising, Overstock seems like it will never be much more than a bit player in online retail, as it competes directly with Amazon.com, and seems unable to meaningfully differentiate itself. Also, the recent revenue growth has come at a price, as Overstock has missed earnings estimates in its last four quarters. If the retailer can find a way to consistently deliver revenue and profit growth, I may become a believer; but to do that, the company needs a better way to stand out in a sea of online retailers.

Leaked: Apple's next smart device (warning, it may shock you)
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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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