Author Topic: BBBY - Bed Bath & Beyond  (Read 18726 times)

DanielGMask

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Re: BBBY - Bed Bath & Beyond
« Reply #50 on: April 15, 2018, 12:00:07 PM »
Iíve been a shareholder for years and on this one Iím down a lot! I think these are the 4 more likely possible outcomes (or a combination):

1) They continue to do more of the same and margins continue to get worse until they either become a much more smaller company or go bankrupt.

2) They stop the bleeding and stabilize margins during 2018 or 2019.

3) They are bought by other company, either in the near future or down the road.

4) They manage to become the expert retailer in their niche (as they used to be) and achieve better margins than current ones.

Iíve not sold because I think that outcomes 2, 3 and 4 are still probable and I may recoup some of my losses. Their wedding registry service is highly used and if they really achieve an omnichanel platform thatís going to help them maintain an advantage.

Having said that, even though the company looks cheap at current prices, thereís no clear recovery path and what seems cheap may even become a cigar butt in a not so distant future.
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Og

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Re: BBBY - Bed Bath & Beyond
« Reply #51 on: April 15, 2018, 12:31:03 PM »
Why not just take a capital gains loss and use your capital to invest in something with same upside that's just a bit easier. I don't know personally, this just seems too hard for me to get interested in. Many more opportunities that are also cheap but where I see the downside a lot lower.

DanielGMask

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Re: BBBY - Bed Bath & Beyond
« Reply #52 on: April 15, 2018, 12:57:29 PM »
Why not just take a capital gains loss and use your capital to invest in something with same upside that's just a bit easier. I don't know personally, this just seems too hard for me to get interested in. Many more opportunities that are also cheap but where I see the downside a lot lower.

Willing to share some of those opportunities?

Itís the first time in 12 years of stock investments that I lose such a big percentage of my original investment and it has been tough to accept the loss and move on before thereís nothing left!
You should follow me on twitter @DanielGMask

Spekulatius

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Re: BBBY - Bed Bath & Beyond
« Reply #53 on: April 15, 2018, 03:53:31 PM »
Why not just take a capital gains loss and use your capital to invest in something with same upside that's just a bit easier. I don't know personally, this just seems too hard for me to get interested in. Many more opportunities that are also cheap but where I see the downside a lot lower.

Willing to share some of those opportunities?

It’s the first time in 12 years of stock investments that I lose such a big percentage of my original investment and it has been tough to accept the loss and move on before there’s nothing left!

There are always tax losses left. I would take the tax losses and move on. If you really think, BBBY is unique, you can buy back after 31 days with the tax losses locked in.
« Last Edit: April 15, 2018, 06:13:37 PM by Spekulatius »
To be a realist, one has to believe in miracles.

Txvestor

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Re: BBBY - Bed Bath & Beyond
« Reply #54 on: April 15, 2018, 04:33:17 PM »
This looked cheap at 50 and it looks cheap today. The company has bought back a lot of stock
even leveraging its pristine balance sheet a couple of years ago. Obviously management was WRONG
to do that as their business has continued to deteriorate. There has been talk of a private equity buyout for the past 5yrs cuz ďits just too cheap to ignoreĒ etc. but alas no such entity has emerged.
The problem with these national bricks and mortar retailers is that they have all these long dates
liabilities like leases etc. that they canít move nimbly. A slow liquidation of sears has been in progress for over a decade and all sorts of value guys got it wrong. It is sure not easy. If business deteriorates rapidly their margins can get crushed very rapidly. Unfortunately BBBY management has jist been chasing its tail and arguably still doesnít seem to have a good strategy goong forward. Of all the retailers to my mind they are the one most susceptible to being amazoned.
my past experience with such melting ice cubes and value investing has been nearly universally bad and that is what kept me out of the stock even as it kept popping up on valuation screeners and some 13fs as well.
As hard as it is to sell so far down, you should consider doing it. A question I ask myself when I am so neck deep down is the inverted question. Would I buy here? If the answer is no, then perhaps its your denial thats preventing you selling. 😀.
I recently sold my GE shares in the high teens in such an unfortunate scenario. As painful as it was, seeing it at 13 now makes me realize that I probably did the right thing. The other thing to this is even if these stocks turn around, they seldom if ever start galloping again. You are better served with companies that have secular tailwinds rather than headwinds, these stocks tend to be cigar butts in a best case scenario.
The problem with secular growth stocks however is that they are so dog gone expensive. Its better to try and find the odd one that is mispriced either cuz the matket didnít recognize it or more often in this expensive market cuz it underestimated its moat or runway ahead.

My 2c of course. Certainly not any investment advise.
« Last Edit: April 15, 2018, 04:41:05 PM by Txvestor »

CorpRaider

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Re: BBBY - Bed Bath & Beyond
« Reply #55 on: April 15, 2018, 05:27:47 PM »
Yeah, the core seems very Amazonable, with the exception maybe of the registry business, but Buy Buy Baby, One Kings Lane, World Market and Christmas Tree Shops I dunno.  They have just a weird assortment in some of the stores.  Like Christmas Tree shops sells Kcups, why?

They are trying out a membership fee program like prime.  I personally don't see that working, at all.  The point about long duration liabilities, I don't know, they've got about 400 stores with leases expiring over the next two years.  That's about 26% of their stores.  Mgmt says this is intentional.

I think they were very late to realize the moves needed, but hey maybe they can buy a smaller jet.com and no one will care about profitability or margins and they will be good to go. 

I don't invest in retail, but I think I own some as part of a basket via QVAL.  I'm good with that.

Spekulatius

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Re: BBBY - Bed Bath & Beyond
« Reply #56 on: April 15, 2018, 06:34:21 PM »
This looked cheap at 50 and it looks cheap today. The company has bought back a lot of stock
even leveraging its pristine balance sheet a couple of years ago. Obviously management was WRONG
to do that as their business has continued to deteriorate. There has been talk of a private equity buyout for the past 5yrs cuz ďits just too cheap to ignoreĒ etc. but alas no such entity has emerged.
The problem with these national bricks and mortar retailers is that they have all these long dates
liabilities like leases etc. that they canít move nimbly. A slow liquidation of sears has been in progress for over a decade and all sorts of value guys got it wrong. It is sure not easy. If business deteriorates rapidly their margins can get crushed very rapidly. Unfortunately BBBY management has jist been chasing its tail and arguably still doesnít seem to have a good strategy goong forward. Of all the retailers to my mind they are the one most susceptible to being amazoned.
my past experience with such melting ice cubes and value investing has been nearly universally bad and that is what kept me out of the stock even as it kept popping up on valuation screeners and some 13fs as well.
As hard as it is to sell so far down, you should consider doing it. A question I ask myself when I am so neck deep down is the inverted question. Would I buy here? If the answer is no, then perhaps its your denial thats preventing you selling. 😀.
I recently sold my GE shares in the high teens in such an unfortunate scenario. As painful as it was, seeing it at 13 now makes me realize that I probably did the right thing. The other thing to this is even if these stocks turn around, they seldom if ever start galloping again. You are better served with companies that have secular tailwinds rather than headwinds, these stocks tend to be cigar butts in a best case scenario.
The problem with secular growth stocks however is that they are so dog gone expensive. Its better to try and find the odd one that is mispriced either cuz the matket didnít recognize it or more often in this expensive market cuz it underestimated its moat or runway ahead.

My 2c of course. Certainly not any investment advise.

I agree with above. I think Timisoara fooolishnto invest before signs of a turnaround are seen. a the runaround does not look likely either and if margins keep on shrinking and SSS falling, I donít see why the shares should stop be falling either. Turnaround are tough, especially in retail. I wouldnít bet on it, unless you have some clear insight why this one will.
To be a realist, one has to believe in miracles.