Bed Bath & Beyond Breaks $61 Per Share

Here’s a real world lesson in investing. Last month, shares of Bed, Bath & Beyond ($BBBY) got knocked down after the company’s earnings report. I thought the earnings report was very good but the traders apparently disagreed. The shares were brought down from over $61 to under $57 within a few days. I said in CWS Market Review that the drop in the stock was hard to understand.

Now let’s march forward a few weeks. Even though no important news has come out from the company in the last month, the shares have quietly recovered. Today BBBY got as high as $61.39. It’s almost as if nothing happened. Once again, a company’s true value will eventually win out. Though it may take a while.

The S&P 500 is up again today. This could be our ninth rally in 11 days so far this year. The technology sector is especially strong today as are homebuilders. The major banks were sluggish yesterday but a strong earnings report from Goldman ($GS) is giving the sector a lift today. The S&P 500 has beaten estimates for the last 11 quarters in a row but this one may break the streak. In fact, there’s a very good chance that Q4’s earnings will come in below Q3’s.

Posted by on January 18th, 2012 at 12:23 pm

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