|Bid||2.1800 x 800|
|Ask||2.1800 x 2200|
|Day's Range||2.1500 - 2.3500|
|52 Week Range||0.5500 - 3.1200|
|Beta (3Y Monthly)||1.42|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||0.20 (9.22%)|
|1y Target Est||N/A|
In late September, I wrote a gallery on InvestorPlace.com about "lottery stocks", or high-risk, high-reward stocks with huge long-term upside potential.The theme of the gallery was very simple. It was reiterated by our very own CEO, Brian Hunt, in his October piece on lottery stocks. Investors of all shapes and sizes would be wise to invest some money into a basket of these high-risk, high-reward lottery stocks because doing so is all about risking a tiny bit of money for the shot of making a fortune.Sure, the actual lottery is all about the same thing. Buy a scratch ticket for a few bucks. Have a 0.0001% chance of winning the jackpot. Still, no one would consider this a financially wise decision because the odds of winning are so small.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut, investing in lottery stocks has much more favorable odds … if you do the leg work of figuring out which lottery stocks have the best chance of turning into multi-baggers in the long run.I've done that work for you. I've identified a handful of lottery stocks that have visible and realistic pathways to 200%-plus upside over the next few years. Are they still risky? Of course. But, the risks here are fully compensated by the possibility of huge long term returns. * 7 Strong Retail Stocks to Buy for the 2019 Holiday Season This column examines five stocks deemed worth of the term "lottery stocks," each with a very realistic chance to triple over the next few years. Lottery Stocks That Could Triple: Plug Power (PLUG)Source: Shutterstock Current Price: $3.50 Potential Future Price: $12One lottery stock that I'm particularly bullish on is hydrogen fuel cell, or HFC, maker Plug Power (NASDAQ:PLUG), because this company has a visible opportunity to grow by leaps and bounds over the next few years if hydrogen become a viable second fiddle to electricity in the alternative fuels market -- and that very well could happen.In the alternative fuels market, there are basically two core and competing technologies: hydrogen and electricity. You've heard all about electricity because, at present, it's much better than hydrogen. That is, it's safer, it's cheaper, and it's supported by better infrastructure.But, hydrogen tech has it's advantages. The two big ones? Shorter recharge times and longer range, meaning that hydrogen cars actually save consumers a ton of time. Some consumers really value time. For those that do, hydrogen could become a more attractive alternative fuel option than electricity, especially as hydrogen safety continues to go up and HFC costs continue to come down (both of which are already happening).Given that, here's the bull thesis on PLUG stock. Plug Power is at the epicenter of the HFC market. It's only an $800 million company. Tesla (NASADQ:TSLA), the world's leading electric car company, has a $65 billion market cap. Thus, even if HFC tech only gets to a tenth the popularity of electric cars at scale, one could still very reasonably argue that Plug Power would warrant a market cap the tenth the size of Tesla, or about $6.5 billion, in the future.Indeed, the numbers do work out like that. Plug Power management expects expansion of HFC adoption in core commercial markets to drive big growth over the next few years. Specifically, management is pointing towards $1 billion in revenue by 2024, with $200 million in EBITDA. Is that possible? Yes. If Plug Power does hit those aggressive targets, the numbers shake out for the company to net about $0.50 in EPS by 2024, and likely somewhere around $0.60 in EPS by 2025.Apply a growth stock average 20-times forward multiple to that $0.60 EPS base in 2025. That implies a 2024 price target of $12, which means that in an "everything goes right" scenario, PLUG stock could rally more than 200% from here over the next few years. Nio (NIO)Source: Sundry Photography / Shutterstock.com Current Price: $1.80 Potential Future Price: $14Often dubbed the "Tesla of China", Chinese luxury electric vehicle maker NIO (NASDAQ:NIO) has a realistic opportunity to turn secular EV and self-driving trends into big growth for the company over the next few years.The story on NIO is pretty straightforward. This company was supposed to be just like Tesla. Start with one premium EV. Sell a bunch of those models. Establish strong brand equity. Leverage that strong brand equity to keep launching new, high-demand EV models. Gradually gain share in the huge Chinese EV market, and leverage scale to produce huge profits.Things haven't played out like they were supposed to. NIO started off with a bang, but over the past few quarters, delivery volumes have come tumbling lower, even amid a new car launch, mostly because: 1) there are simply too many EV companies in China, and 2) the EV market in China slowed considerably in 2019.But, given that this company has crafted a niche for itself in the luxury EV market and that the company just announced a strategic collaboration with Intel's (NASDAQ:INTC) Mobileye unit for the development of self-driving cars, there is a possibility that NIO regains its groove over the next few years. * 7 Subscription Stocks to Buy for Long-Term Gains Let's say they do. The numbers here work out so that China's EV market will likely measure around 7 million to 10 million cars by 2030. NIO could control about 5% of the market, implying around 375,000 EV deliveries in 2030. Assuming a $50,000 ASP and auto average 10% operating margins, we could easily be looking at $1.40 in earnings per share. Based on a market-average 16-times forward multiple and 10% annual discount rate, that implies a 2024 price target for NIO stock of $14. Stage Stores (SSI)Source: WhisperToMe via Wikimedia CommonsCurrent Price: $2.20 Potential Future Price: $9.50Struggling department store operator Stage Stores (NYSE:SSI) ostensibly looks like just another retailer that is being made irrelevant by Amazon (NASDAQ:AMZN). But, underneath the hood, Stages Stores is making some aggressive changes, and if they work, SSI stock could be a multi-bagger in the long run.Long story short, Stage Stores has been killed by online retail competition over the past few years. Comparable sales, revenues, and margins have all dropped. Profits have been wiped out. SSI stock has plummeted, weighed by not just an operational crash but also by a heavily levered balance sheet.But, management is finally doing something to right the ship. Specifically, Stages Stores owns both full-price and off-price stores. The off-price stores are doing much better than the full-price ones. Management is now in the process of converting all of its full-price stores, to off-price stores. The result? Stage Stores could look like a mini TJX (NYSE:TJX) or Ross Stores (NASDAQ:ROST) within a few years.Those off-price retail giants have stable sales bases and margins. If SSI's off-price transition works out, that's exactly what should happen. Sales will stabilize, and margins will peek back into positive territory. Making conservative assumptions on both fronts (sales stabilize around their current $1.5 billion base and operating margins move towards 2.5%), then Stage Stores could realistically net about $0.50 in earnings per share by 2025.Based on an apparel retail sector-average 19-times forward earnings multiple, that implies a 2024 price target for SSI stock of $9.50. Aurora (ACB)Source: Shutterstock Current Price: $2.30 Potential Future Price: $16The cannabis market has been under siege recently, amid crumbling demand trends and widening losses. Canadian cannabis producer Aurora (NYSE:ACB) hasn't been an exception to the trend. But, in the long run, Aurora still looks positioned to be an important player in a huge market, and ACB stock is way undervalued today if that reality comes to fruition.There's a lot going wrong in the cannabis market today. Demand is staying in the black market, because the legal market is having trouble keeping up with black market prices (taxes and fees make the legal market cost base way higher than the black market cost base). Legal producers are having to discount their cannabis to compete. The result? Slowing demand and falling margins, a troublesome combination for what was supposed to be a growth industry.But, the core fundamentals here remain favorable. That is, data shows that not only is cannabis consumption on the up and up, but also that young consumers like to smoke cannabis almost as much as they like to drink alcohol. The implication? Once the legal market figures out logistics and pricing, and out-muscles the black market, the legal cannabis market will be very, very big in a decade -- like $200 billion big.Aurora is currently one of the biggest players in the cannabis world. More competition over the next several years will bring Aurora's market share lower. Ultimately, though, this company should be able to nab 5% share in the $200 billion cannabis market, implying about $10 billion in revenues by 2030. * These 10 Stocks to Buy Make the Perfect 'Retirement' Portfolio ACB's gross margins are already at 60%. Opex rates should fall toward more normal 30% levels with scale, eventually resulting in 30% operating margins. That's about $3 billion in operating profits. Take out 20% for taxes. Assume 1.5 billion shares out. Use a price-earnings multiple of 16, which is average for the market. All that math gets you to a 2029 price target for ACB stock of over $25. Discounted back by 10% per year, that equates to a 2024 price target of nearly $16. Stitch Fix (SFIX)Source: Sharaf Maksumov / Shutterstock.com Current Price: $20 Potential Future Price: $64Last, but not least, on this list of potential lottery stocks that could triple is personalized styling service Stitch Fix (NASDAQ:SFIX), a company which could change the entire apparel retail model, and in so doing, become a multi-bagger stock over the next few years.Apparel retail today works like this. You go in a store or to a website. You peruse apparel in different categories, adding some to your checkout cart as you go. At the end of the shopping trip, you pay for the stuff you liked and wanted.Seems simple, right? Sure. But, Stitch Fix is in the game of making it even more simple. Imagine if you could just sign up for a service that had a bunch of personalized stylists, and those personalized stylists did all the shopping for you. All you have to do is answer a few questions, and sit back and wait for the clothes to arrive. Better than that, if you don't like what the stylists picked out, you can send it right back.That's the Stitch Fix model. They are taking the thinking out of shopping so it becomes as easy as just answering a few questions. Sure, it's not for everyone. Some people really enjoy going into stores and doing their own shopping. But, this model unequivocally saves time, and it's also professionally curated, so for us design-challenged folks, it yields better results, too.The implication? It seems inevitable that Stitch Fix's reach across the apparel retail landscape will only grow over time. This is a huge, huge market -- $430 billion in the U.S. and United Kingdom alone. Stitch Fix is a small company -- only $1.6 billion in revenue over the last twelve months. Thus, the opportunity for further growth here is tremendous.All things considered, Stitch Fix should grow sales at a 20% pace over the next several years. During that stretch, operating margins should improve thanks to increased scale. Assuming so, then this company could be looking at $3.20 in earnings per share by 2025.Based on a consumer discretionary sector-average 20-times forward earnings multiple, that equates to a 2024 price target for SFIX stock of $64 -- up more than three-fold from today's $20 price tag.As of this writing, Luke Lango was long PLUG, TSLA, INTC, RJX and SFIX. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Best High-Growth Stocks to Buy for Young Investors * 7 Stocks to Buy With Great Charts * 7 Troubled Dividend Stocks With Yields Too Good to Be True The post 5 Lottery Stocks With Triple-Digit Upside appeared first on InvestorPlace.
One of the hardest things to do in the stock market is to time the bottom in a falling stock. That's because momentum is a very real thing. Stocks that have been trending higher, usually continue to trend higher. Stocks that have been trending lower, usually continue to trend lower.But that doesn't mean investors should completely avoid buying the dip in falling stocks. Those can often turn into some of the most profitable trades.Instead, it means investors should be very selective in buying dips and pay attention to the clues surrounding these falling stocks.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOne such clue is insider activity. That is, investors should look for falling stocks which insiders are buying on the dip, since this show of confidence from insiders is usually a bullish sign that the worst is over and a bottom is close. * 7 Stocks to Buy in November With that in mind, let's take a look at five cheap and falling stocks that insiders are buying the dip in, and see whether or not these stocks have actually bottomed. Insider Buying Stocks: Ulta (ULTA)Source: Jonathan Weiss / Shutterstock.com Shares of cosmetics retailer Ulta (NASDAQ:ULTA) fell off a cliff in late August after the company reported ugly second-quarter numbers which missed revenue and profit estimates, and also included a cut to its full-year profit guide.In the wake of that big selloff, insiders have turned bullish. Specifically, there have been five open market purchases of ULTA stock since the post-earnings selloff, led by long-time board member Charles Heilbronn. This was the guy was cashing out on ULTA stock on the way up -- before the plunge. Thus, the fact that he's buying the dip now is a bullish reversal sign.Indeed, Heilbronn is part of a broader reversal here. Over the past three months, there have been zero insider sales of ULTA stock. Compare that to the prior nine months, where there were 37 insider sale transactions. In other words, insiders aren't selling anymore.Does that mean the worst is over for ULTA stock? I think so. The post-Q2 selloff was overdone. Sure, the numbers weren't great, and the growth narrative here is slowing. But, this is a still a very strong company, supported by secular cosmetics adoption tailwinds, healthy margins, direct retail expansion and a big unit growth runway.In the long run, those strong growth drivers will power profits significantly higher. As those profits trend higher, so will ULTA stock. The Tile Shop (TTS)Source: Rosemarie Mosteller / Shutterstock.com Struggling retailer The Tile Shop (NASDAQ:TTS) recently reported really ugly third-quarter numbers in late October that included negative comparable-store sales growth, margin erosion, a net loss and a surprise delisting announcement. In response to the ugly print, TTS stock lost more than two-thirds of its value.In the wake of the huge selloff, though, insiders stepped up. Board member Peter Jacullo bought roughly 2.4 million shares over the span of a few days, while the chief financial officer and chief accounting officer both acquired about 60,000 shares. In response to this vote of confidence from insiders, investors have bought the dip, too. From its post-earnings lows, TTS stock is already up 90% -- and it's only been a few days.Will this rebound last? It's tough to say. At current levels TTS stock is certainly cheap. But, revenues, margins and profits are all dropping. Current fundamentals imply that they will keep dropping, as The Tile Shop finds itself as an undifferentiated retailer in a crowded building materials space that is rapidly consolidating around leaders like Home Depot (NYSE:HD) and Floor & Decor (NYSE:FND). * 7 Dividend Stocks That Could Struggle to Continue Payout Hikes As such, this insider-driven rebound in TTS stock may just be a head-fake. Until the fundamentals turn around here, caution is warranted. Stage Stores (SSI)Source: WhisperToMe via Wikimedia CommonsDepressed department store operator Stage Stores (NYSE:SSI) has been the recipient of significant insider buying over the past three months as the company has more aggressively pursued its discount-oriented turnaround plan.Here's the story. Stage Stores owns two types of stores -- full-price stores and off-price stores. The full-price stores aren't doing well. The off-price stores are doing much better. But, most of the company's stores today are full-price stores. Management wants to change that. They want to close some of those full-price stores and turn the rest into off-price stores. Thus, the big plan here is to turn Stage Stores into a mini TJX (NYSE:TJX) or Ross Stores (NASDAQ:ROST).Will it work? It could. And, if it does, SSI stock could turn into a multi-bagger in the long run. Just look at the sales multiple on SSI. It's below 0.05. Now look at the sales multiples on TJX and ROST. They are each north of 1.8.Insiders clearly believe in the plan. Over the past three months, as the company has converted multiple full-price stores into off-price ones, there have been 10 open market insider purchases, and just one insider sale.Should you buy in too? That depends on your risk appetite. The stock has come very far, very fast, so if the turnaround plan doesn't work as hoped, the stock could fall a lot from here. At the same time, there's also a bunch of upside potential in the event the turnaround does work. It's a typical high-risk, high-reward situation -- and it's tough to say which way the stock will go next. GameStop (GME)Source: Emil O / Shutterstock.com Shares of struggling video game retailer GameStop (NYSE:GME) have been in a secular decline for several years now, as revenues and profits have been wiped out by a shift from physical to digital video games.But, GME stock has essentially doubled since mid-August amid renewed optimism regarding the company's growth prospects in 2020 and 2021. Specifically, at the end of 2020, PlayStation and Xbox are set to unveil new generation video game consoles for the first time since 2013. That is supposed to create huge tailwinds throughout the entire video game industry, and those tailwinds should power meaningfully improved results at GameStop.Ahead of this game-changing catalyst, investors and insiders alike are buying GME stock in bulk. In September 2019, five different insiders executed six different open market purchases of GME stock -- the first open market purchases by insiders since September 2016. * 10 Stocks to Buy Regardless of Q3 Earnings The big question now is will the big rebound in GME stock continue? I think so. There's a lot of optimism out there regarding the 2020 video game console upgrade cycle, and all this optimism will continue to translate into strong demand for GME stock. Kraft Heinz (KHC)Source: Casimiro PT / Shutterstock.com A lot has gone wrong for global consumer staples giant Kraft Heinz (NASDAQ:KHC) over the past few years, as an obsession with cost-cutting has come at the expense of growth. But, one thing that has gone right over the past few months is that insiders are finally starting to buy the dip in beaten up KHC stock.Over the past twelve months, KHC stock has dropped 40%. For the first nine months of that selloff, insiders refused to buy the dip. There were zero insider purchases during that stretch. But, over the past three months, insiders have fully embraced a "buy-the-dip" mentality. During this stretch, there have been a whopping 22 insider purchases.This insider vote of confidence has sparked life back into KHC stock. Most of the insider buying started in mid-August. Since then, KHC stock is up 13%.Will this newfound strength in KHC stock persist? It could. There's a new management team here, and this new management team is less obsessed with cutting costs than its predecessors. Instead it's more obsessed with organic growth. That's the right mindset to adopt going forward. It should stabilize revenue growth and return the company to positive profit growth.If that happens, then KHC stock -- which presently trades at just 12.6 times forward earnings -- has plenty of room to run higher.As of this writing, Luke Lango was long ULTA, TJX and GME. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Buy-and-Hold Stocks to Play Investing's Biggest Trends * 7 Stocks to Buy in November * 5 Strong Buy Stocks Under $5 With Massive Upside Potential The post 5 Cheap Stocks Welcoming Insider Buying appeared first on InvestorPlace.
Amazon.com Inc. said Wednesday that it has expanded its Counter third-party package pickup service to thousands of new stores. Counter was launched in June at more than 100 Rite Aid Corp. stores. Now it has been added to GNC , Health Mart and Stage Stores . Counter allows customers using same-day, next-day, two-day and standard shipping to go to a brick-and-mortar retailer to retrieve an order. Amazon stock is up 17.3% for the year to date while the S&P 500 index is up nearly 20%.
E-commerce giant Amazon.com, Inc. (NASDAQ: AMZN) is expanding its in-store pickup service Counter, announcing on October 23 that it is partnering with GNC Holdings Inc (NYSE: GNC), Health Mart and Stage Stores Inc (NYSE: SSI). This move will allow consumers access to thousands more Counter locations and comes just months after the online retailer announced its in-store pickup service in 100 Rite Aid Corporation (NYSE: RAD) locations in the U.S.
The NYSE warned the company in June that it was at risk of delisting because its average stock price had fallen too low.
Stage Stores Inc. stock jumped 13.3% after its Tuesday announcement that it will shift "substantially all of its stores" to an off-price model. Stage Stores operates 625 stores under the Bealls, Goody's, Palais Royal, Peebles and Stage department stores. The company's existing 158 Gordmans stores are off-price. Based on the success of the conversions, the company will shift the remaining stores in February 2020. By the third quarter of fiscal 2020, Stage Stores plans to operate about 700 largely small-market Gordmans stores. Also in fiscal 2020, Stage Stores plans to close 40 stores. Stage Stores expects to spend about $30 million on the conversion. The company has converted 98 stores to off-price since 2018. Stage Stores stock has fallen by more than 50% over the last 12 months, but has rallied 30.2% in 2019. The S&P 500 index has gained 19.6% for the year to date.
Another one bites the dust. In early September, discount retailer Fred's (NASDAQ:FRED) announced that it was filing for Chapter 11 bankruptcy protection and shuttering all of its stores. Fred's joins a long list of retailers that have declared bankruptcy over the past several years as technology has dramatically and irreversibly altered the retail landscape. That list includes once loved retailers like Barneys, Sears and Toys "R" Us, among many, many more.Over the next several years, this list will only get longer. Looking at the retail scene, while the broad outlook for physical and digital retailers remains positive, there are a handful of retailers out there that are only a few quarters away from shuttering their doors.These are retailers that were: 1) slow to adapt to the e-commerce shift, 2) have been losing share and relevance for the past few years, 3) are now operating with depleted resources and simply don't have the financial firepower to make the necessary changes and enhancements to their business to survive, and 4) are holding a huge pile of debt.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks to Sell in Market-Cursed September Ultimately, if a retailer checks off those four boxes, then that's probably a retail stock heading for the graveyard -- meaning it's a retail stock you want to sell.With that in mind, let's take a look at six retail stocks to sell on their way to bankruptcy. Retail Stocks to Sell: J.C. Penney (JCP)Source: Supannee_Hickman / Shutterstock.com First up, we have forgotten mall retail giant J.C. Penney (NYSE:JCP).At one point in time, J.C. Penney was at the heart of the American retail landscape, back when consumers did all of their shopping at malls. Times have changed since then. Namely, consumers have migrated to off-mall and online retail channels. J.C. Penney has been slow to adapt to those changes. They didn't build out an e-commerce business as quickly as they needed to. They didn't develop omni-channel capabilities as quickly as they needed to. And, they didn't update their stores or offerings in a way that they needed to.As such, the once all-important mall retail giant has become largely irrelevant with negative comps and falling margins. J.C. Penney will remain irrelevant for the foreseeable future because this company doesn't have enough cash (only $175 million in cash on the balance sheet) nor does the business produce enough cash (negative free cash flow year-to-date) to allow management to invest that much -- if anything -- back into the business.Further complicating things, there's over $5 billion in total debt sitting on the balance sheet. Thus, any cash this company does produce is going to have to go towards paying off debt.There isn't much to like about JCP here. You have a depressed and forgotten retailer with rapidly depleting resources and a bunch of debt -- that combination ultimately implies that bankruptcy is coming soon. Ascena Retail (ASNA)Source: Jer123 / Shutterstock.com Lesser known than J.C. Penney but in just as much financial trouble, women's apparel retailer Ascena Retail (NASDAQ:ASNA) could easily wind up bankrupt within the next few quarters.Ascena is the parent company behind women's apparel brands like Ann Taylor, LOFT, Lou & Grey, Lane Bryant, Catherines and Justice. Those brands simply aren't all that important in the modern women's apparel retail landscape. They aren't very differentiated and they have a ton of competition. As such, it should be no surprise that over the past several years, Ascena's comparable sales and margin trends have been sharply negative.The big problem here -- as is the case with J.C. Penney -- is that this company doesn't have the resources to improve its product portfolio. There is only $100 million in cash on the balance sheet against the backdrop of over $1.3 billion in long-term debt. Further, cash flow is negative year-to-date, comps are still negative and gross margins are still dropping. Thus, this company is not nor does it project to produce sizable cash any time soon. * 7 Stocks to Buy In a Flat Market An inability to produce cash plus over $1.3 billion in leverage equals looming bankruptcy. That's why ASNA stock has been so beaten up, and why it will remain depressed for the foreseeable future. Stage Stores (SSI)Source: WhisperToMe via Wikimedia CommonsAnother department store operator which finds itself on this list of retail stocks on the verge of bankruptcy is Stage Stores (NYSE:SSI).The story at Stage Stores is very similar to the stories at J.C. Penney and Ascena. Broadly speaking, you have a retailer that accumulated a lot of debt to fuel expansion during its growth years. But, e-commerce disruption ended SSI's growth years, and because the company has failed to adapt its operations in a meaningful way to the e-commerce disruption, sales and profit trends have been hugely negative for several years. Now, SSI is left with largely depleted resources (only $25 million in cash), a still big debt load (over $675 million) and very little visibility to produce enough cash to service the debt load.To be sure, comps here are positive -- a rarity on this list -- as Stage Stories is trying to survive by converting its full-price department stores into more popular off-price discount stores. This transition has potential. But, margins are still dropping, EBITDA is still falling and cash flows are still negative. Plus, off-price stores don't always work out, either -- just ask Fred's.Thus, this move may be too little, too late. Ultimately, it does appear that despite this smart off-price pivot, the ultimate outcome here is for Stage Stores to end up in the retail graveyard. Big 5 Sporting Goods (BGFV)Source: Jonathan Weiss / Shutterstock.com The sporting goods sector has had its fair share of bankruptcies over the past several years, and the industry may get another bankruptcy soon with Big 5 Sporting Goods (NASDAQ:BGFV).In the big picture, the sporting goods sector got too big to be sustainable. That is, now that Walmart (NYSE:WMT), Amazon (NASDAQ:AMZN) and Target (NYSE:TGT) all sell a ton of sporting goods equipment, the market doesn't need a dozen sporting goods department stores anymore. It only needs one or two -- meaning that this market is consolidating around a handful of larger players. Big Five simply isn't one of those players, and as such, it's tough to see there being enough room in the market for Big Five to stay around for much longer.The financials here aren't pretty, either. Big Five has a ton of debt -- about $350 million in debt and operating lease liabilities. Meanwhile, there's only $6.6 million in cash on the balance sheet. Cash flows haven't been consistently positive for about a decade, and the outlook remains dim for them to be consistently positive anytime soon. Comps are positive, but gross margins and profits are still dropping as discounting appears to be driving the positive comps. * The 8 Worst Stocks to Buy Before the Trade Turmoil Cools Off There's not much to like here. The sporting goods sector is consolidating, and that consolidation is squeezing out Big 5, who -- with only $6 million in cash left against nearly $350 million in debt -- seems to be on the verge of the bankruptcy. Pier 1 (PIR)Source: Jonathan Weiss / Shutterstock.com Next up, we have struggling furniture retailer Pier 1 (NYSE:PIR), who checks off all the boxes of a retail company on the verge of bankruptcy.Limited resources? Check. Pier 1 only has $30.5 million in cash on the balance sheet. Tons of debt? Check. Against that tiny $30.5 million cash balance, Pier 1 has $950 million in total debt on the balance sheet. Negative sales trends? Check. Comparable sales dropped 13.5% last quarter. Sales dropped 15.5%. Retreating margins? Check. Gross margins dropped over 700 basis points last quarter, and operating losses widened. Negative cash flows? Check. Cash flows have turned sharply negative this year, and there isn't much visibility for them to turn back into positive territory anytime soon, if ever.Zooming out, Pier 1 has struggled as e-furniture retailers like Wayfair (NYSE:W) have jumped onto the scene and stolen market share. The big problem? E-commerce penetration rates in furniture retail are around 13%, versus roughly 30% for apparel and consumer electronics. Thus, the e-commerce disruption problem for Pier 1 will only get bigger and bigger over time. As it does get bigger, things will only get worse. Sales will keep dropping, margins will keep retreating, losses will widen, and eventually, the company simply won't have enough financial firepower to service its near $1 billion in debt.PIR stock may not be around for much longer. Bed Bath & Beyond (BBBY)Source: Jonathan Weiss / Shutterstock.com The story at Bed Bath & Beyond (NASDAQ:BBBY) is very similar to the story at Pier 1.Big picture, both are struggling home goods and furniture retailers which are being squeezed out of the market. When it comes to Bed Bath & Beyond, there are two things at play here. One, the mainstream emergence of e-furniture retailer players like Wayfair has pulled customers away from BBBY stores. Two, the expansion of big box retailers like Amazon, Walmart and Target into the home goods and furniture game has eroded BBBY's differentiation in a very crowded retail marketplace.The result? Many consumers have left Bed Bath & Beyond stores, and unless the company runs huge discounts (which would kill margins and lead to huge losses), those churned customers don't have much reason to go back.That's why comps and sales trends have been, are and will remain negative. Same with margin and profit trends. It doesn't help that cash and cash flows are limited, and that the debt load is enormous.Overall, it seems like Bed Bath & Beyond is doomed for a similar fate as Pier 1.As of this writing, Luke Lango was long TGT and W. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post 6 Retail Stocks on the Verge of Bankruptcy appeared first on InvestorPlace.
Nordstrom reported better-than-expected second quarter financial results in a continuation of an ongoing bullish trend in retail consumer spending.
On a per-share basis, the Houston-based company said it had a loss of $1.67. The department store operator posted revenue of $327.7 million in the period. Stage Stores expects a full-year loss of $2.25 ...
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card! Michael Glazer became the CEO of Stage Stores, Inc. (NYSE:SSI) in 2012. This analysis aims...
Want to participate in a research study? Help shape the future of investing tools and earn a $60 gift card! Stage Stores, Inc. (NYSE:SSI) shareholders will doubtless be very grateful to see the share price up 35% in the last quart...
Want to participate in a short research study? Help shape the future of investing tools and receive a $20 prize! If you want to know who really controls Stage Stores,Read More...
Axar Capital Management was founded in 2015 by Andrew Martin Axelrod. The hedge fund based in New York City provides services to pooled investment vehicles and institutional clients. Even though Axar Capital Management is a young firm, its founder sharpened his investment acumen years before starting it. Mr. Axelrod is the former Partner and co-head […]
The following three stocks are outclassing the S&P 500 index in terms of higher dividend yield. The benchmark for the U.S. stock market has a dividend yield of 2.12% as of Wednesday. The first stock is Stage Stores Inc. (SSI) with a share price of $1.02 at close on Wednesday.