Bed Bath Story

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BBBY -- USA Stock  

USD 26.87  3.34  11.06%

Bed Bath Beyond is scheduled to announce its earnings tomorrow. The upcoming quarterly report is expected on the 7th of January 2021. While some investors are becoming indifferent towards consumer cyclical space, we are going to break down the feasibility of acquiring Bed Bath as a potential hedging instrument for your current portfolios. We will analyze why it could be a much better year for Bed Bath shareholders.
Published over two weeks ago
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Our current take on Bed Bath (NASDAQ:BBBY) analyst consensus
Bed Bath is OVERVALUED at 19.99 per share with modest projections ahead. Our investment recommendation module complements current analysts and expert consensus on Bed Bath. It analyzes the firm potential to grow using all fundamental, technical, and market related data available at the time.
What is the right price you would pay to acquire a share of Bed Bath? For most investors, it would be the price that gives them a wide margin of safety to have minimal downside risk. In other words, most investors are always looking for undervalued stocks. Even if the future performance is not entirely as expected, the loss of holding it is minimized, and the downside risk is negated. Please read more on our stock advisor page.

What is happening with Bed Bath Beyond this year

Annual and quarterly reports issued by Bed Bath Beyond are formal financial statements that are published yearly and quarterly and sent to Bed Bath stockholders. The reports show and break down the current year's ongoing operations and discuss plans for the upcoming year. Annual reports have been a requirement from the Securities and Exchange Commission (SEC) for businesses owned by the public since 1934. Companies such as Bed Bath often view their annual report as an effective marketing tool to disseminate their perspective on company future earnings or innovations. With this in mind, many companies devote large sums of money to making their reports attractive and informative. In such instances, the annual report becomes a forum through which a company can communicate to the general public any number of topics that may or may not be directly related to the actual data published in the reports.

How Bed Bath utilizes its cash?

To perform a cash flow analysis of Bed Bath, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Bed Bath is receiving and how much cash it distributes out in a given period. The Bed Bath cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Bed Bath Net Cash Flow from Operations is fairly stable at the moment as compared to the past year. Bed Bath reported Net Cash Flow from Operations of 531.85 Million in 2020

Acquisition by Patrick Gaston of 4457 shares of Bed Bath subject to Rule 16b-3

Legal trades by Bed Bath insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Bed Bath insider trading alert for grant of common stock $.01 par value per share by Patrick Gaston, the corporate stakeholder, on 20th of December 2020. This event was filed by Bed Bath Beyond Inc with SEC on 2019-07-29. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking down Bed Bath Further

Earning per share calculations of Bed Bath is based on official Zacks consensus of 7 analysts regarding Bed Bath's future annual earnings. Given the historical accuracy of 47.04%, the future earnings per share of the company is estimated to be -0.5978 with the lowest and highest values of -1.15 and 0.24, respectively. Please note that this consensus of annual earnings estimates for the firm is an estimate of EPS before non-recurring items and including employee stock options expenses.

Is Bed Bath a risky opportunity?

Let's check the volatility. Bed Bath is looking slightly risky at this time. Whether you invest your money or manage your clients' funds, remember that it is easy to forget that behind Bed Bath (NASDAQ:BBBY) stock is an actual business venture. So, do not let stock picking become an abstract concept by ignoring the elementary risk calculations. acquiring a share of a Bed Bath stock makes you a part-owner of that company.

Bed Bath Beyond Current Consensus

Here is the current trade recommendation based on an ongoing consensus estimate among financial analysis covering Bed Bath Beyond. The Bed Bath consensus assessment is calculated by taking the average estimates from all of the analysts covering Bed Bath

Strong Buy
5
Hold
7
Strong Sell
1
Strong Buy538.46
Buy00.0
Hold753.85
Sell00.0
Strong Sell17.69

Over 3 percent rise for Bed Bath. What does it mean for investors?

The value at risk is down to -4.77 as of today. Bed Bath Beyond currently demonstrates below-verage downside deviation. It has Information Ratio of 0.01 and Jensen Alpha of 0.01. However, we do advice investors to further question Bed Bath Beyond expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

The Bottom Line

While other entities within the specialty retail industry are still a little expensive, even after the recent corrections, Bed Bath may offer a potential longer-term growth to investors. The bottom line, as of the 6th of January 2021, our concluding 30 days recommendation on the company is Cautious Hold. We believe Bed Bath is currently overvalued with below average odds of financial turmoil for the next two years.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Bed Bath Beyond. Please refer to our Terms of Use for any information regarding our disclosure principles.

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