Wall Street is applauding Overstock's purchase of Bed Bath & Beyond's intellectual property, and taking that company's name. On Thursday the Relative Strength (RS) Rating for Overstock stock climbed from 76 to 81. Its stock rose nearly 20% before settling to 30.45 Thursday afternoon. Overstock has struggled recently though and it's unclear whether its gamble to take fallen Bed Bath & Beyond's name will improve its results.
Meanwhile, the 81 RS Rating puts Overstock into a higher category. Market research shows that the best-performing stocks typically have an 80 or higher RS Rating in the early stages of their moves.
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Overstock Stock A Favorite Among Big Money Investors
Among its other key ratings Overstock stock has a weak 49 Composite Rating, out of 99. And its Earnings Per Share Rating is a dismal 5. Investors hope its Best Buy assets purchase will improve earnings and revenue growth, and are bidding up its shares. One bright spot is its excellent A- Accumulation/Distribution Rating. The A/D Rating tracks institutional buying by top-rated funds over the prior 13 weeks. The A- rating on an A+ to E scale shows heavy buying of Overstock stock by big money investors, a bullish indicator.
While Overstock stock is not near an ideal entry right now, see if it manages to form and break out from a proper consolidation. Its stock is far below its all-time high 128.50 set in August 2020. It dropped to a low of 17.05 in early January this year. It was slowly rising before its announcement Wednesday afternoon that it's buying the Bed Bath & Beyond brand.
Will Dismal Fundamentals Improve With New Name?
Overstock.com is headquartered in Midvale, Utah, in the Salt Lake City metro area. It hasn't reported a profit since the June 2020-ended quarter. Its losses have shrunk over the last three quarters though, from -81 cents to -34 and -23 cents last quarter. Sales have dropped over the past year too, although it improved to a 29% year-over-year drop in revenue last quarter, to $381.1 million. That was its smallest shrinkage in a year. The next quarterly results are expected on or around July 27.
Overstock stock earns the No. 27 rank among its peers in the Retail-Internet industry group. Chinese e-commerce giant Vipshop Holdings and pet food and supplies company Chewy are among the group's highest-rated stocks.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
IBD's proprietary Relative Strength Rating tracks technical performance by showing how a stock's price movement over the last 52 weeks measures up against that of other stocks on the major indexes.
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