OSTK - Overstock.com

[ASTA]

I am wondering what others are doing with this stock?

As I am sitting on 170% gains it became 20% of my portfolio but sold half before at 15.93.

As the stock is climbing again to the 15 mark what should I do?

My latest idea is to wait for the 4th quarter results.

[Parsad]

I am wondering what others are doing with this stock?

As I am sitting on 170% gains it became 20% of my portfolio but sold half before at 15.93.

As the stock is climbing again to the 15 mark what should I do?

My latest idea is to wait for the 4th quarter results.

 

You can thin it out a bit if you want, but the 4th Q results (not unlike BAC) should be pretty good.  I expect that OSTK made close to a dollar a share in the 4th Q.  Probably close to $1.15-1.25 for the year.  So if they can keep it going, it's not overvalued.  Cheers!

[Guest hellsten]

I am wondering what others are doing with this stock?

As I am sitting on 170% gains it became 20% of my portfolio but sold half before at 15.93.

As the stock is climbing again to the 15 mark what should I do?

My latest idea is to wait for the 4th quarter results.

 

I'm in a similar position. I have not sold any shares so far. I guess the 4th quarter results will be good, but I don't know how the market will react to it:

President Jonathan Johnson wouldn't venture a figure, but he says Q4 sales are tracking higher than Q4 2011. Overstock had three straight quarters of year-over-year revenue declines before notching a 2% rise in Q2 and 7% rise in Q3. He says Q4 is on track for another upswing in that trend.

"We've had a good quarter," Johnson told IBD.

With the economy, fiscal cliff and people nervous about their personal budgets, shoppers are always looking for deals, and "Overstock has always been the place to find things at the lowest price," he said.

Overstock's hottest sellers this year include tablet computers and furniture. And one of the most popular stuffed animals in U.S. history is making a comeback, Johnson says.

"On the toy front, Furby was a big seller this year," he said.

http://news.investors.com/technology/122412-638216-some-online-retailers-see-big-season.htm

 

I'm happy to hold on to OSTK. I have my seat belt on :)

[valuecfa]

Still holding all shares. Even after the run up, i believe the stock still has a lot of upside optionality over a short time period.

[ASTA]

Thanks for the replay.

Well Parsad I will buy you a expensive wine when I come to the Fairfax annual meeting this year or next.

Hellsten I think I am going to jump in the car with you and buckle up hope the car has airbags and good torque up ;D

And I am sure we can maybe rent a mini bus for the forum members how are on this little adventure.   

[Guest hellsten]

Overstock.com Reports FY and Q4 2012 Results:

http://investors.overstock.com/phoenix.zhtml?c=131091&p=irol-newsArticle&ID=1777664&highlight=

 

Key FY 2012 metrics (comparison to FY 2011):

Revenue:  $1,099M vs. $1,054M (4% increase);

Gross margin: 18.1% vs. 17.0% (110 basis point increase);

Gross profit: $198.4M vs. $179.1M (11% increase);

Sales and marketing expense: $63.5M vs. $61.8M (3% increase);

Contribution (non-GAAP measure): $135.0M vs. $117.3M (15% increase);

G&A/Technology expense: $122.7M vs. $134.8M (9% decrease);

Net income (loss): $14.7M vs. $(19.4)M ($34.1M increase); and

Diluted EPS: $0.62/share vs. $(0.84)/share ($1.46 increase).

 

Key Q4 2012 metrics (comparison to Q4 2011):

Revenue:  $342.0M vs. $314.1M (9% increase);

Gross margin: 17.9% vs. 16.2% (170 basis point increase);

Gross profit: $61.2M vs. $50.9M (20% increase);

Sales and marketing expense: $20.6M vs. $18.9M (9% increase);

Contribution (non-GAAP measure): $40.6M vs. $32.0M (27% increase);

G&A/Technology expense: $32.7M vs. $34.1M (4% decrease);

Net income (loss): $8.8M vs. $(3.4)M ($12.2M increase); and

Diluted EPS: $0.37/share vs. $(0.15)/share ($0.52 increase).

[Ross812]

Great quarter. I'm glad Chou has made some money on this one.

[lessthaniv]

;D

[Parsad]

Great year...but I was less impressed with the 4th quarter where I thought they would have made more.  Looks like they increased marketing costs in the 4th.  Markets thought different I guess.  Cheers!

 

[lessthaniv]

yes, i'm anxious to see some topline growth show up. but i'm happy to see a full year of profitibily throughout each quarter.

i like the direction.

[Guest hellsten]

Link to presentation covered in webcast:

http://phx.corporate-ir.net/External.File?t=1&item=VHlwZT0yfFBhcmVudElEPTQ4ODg1NTB8Q2hpbGRJRD00OTExMTM=

 

Overstock is well-positioned to weather any national or global financial crisis in 2013 because the company has planned for many scenarios and because of ongoing efforts to make its global supply chain increasingly nimble, CEO Patrick Byrne told analysts on the company’s year-end earnings call. “We’ve spent the past 18 months making the supply chain more agile and we see that as a competitive advantage,” Byrne told Wall Street analysts. “As for any financial changes nationally or globally we have files in the file drawer ready for any number of scenarios.”

 

Going forward Overstock also sees more competition coming from store-based retailers, particularly chains that have what Byrne calls a good “clicks-and-bricks” strategy. “The big chains are getting better at this and they have an advantage over the pure-plays with their clicks-and-bricks model,” Byrne told analysts. “The store retailers are the competitive segment to watch.”

 

Chain store retailers can take advantage of foot traffic to stores to market their e-commerce brand—a distinct advantage over web-only merchants, Byrne says.

http://www.internetretailer.com/2013/01/24/overstock-boosts-sales-and-profits

 

I sold half my position today. The position became too big and the investment thesis has played out pretty much as I wanted. I would have liked to see a big short squeeze.

[Parsad]

Link to presentation covered in webcast:

http://phx.corporate-ir.net/External.File?t=1&item=VHlwZT0yfFBhcmVudElEPTQ4ODg1NTB8Q2hpbGRJRD00OTExMTM=

 

Overstock is well-positioned to weather any national or global financial crisis in 2013 because the company has planned for many scenarios and because of ongoing efforts to make its global supply chain increasingly nimble, CEO Patrick Byrne told analysts on the company’s year-end earnings call. “We’ve spent the past 18 months making the supply chain more agile and we see that as a competitive advantage,” Byrne told Wall Street analysts. “As for any financial changes nationally or globally we have files in the file drawer ready for any number of scenarios.”

 

Going forward Overstock also sees more competition coming from store-based retailers, particularly chains that have what Byrne calls a good “clicks-and-bricks” strategy. “The big chains are getting better at this and they have an advantage over the pure-plays with their clicks-and-bricks model,” Byrne told analysts. “The store retailers are the competitive segment to watch.”

 

Chain store retailers can take advantage of foot traffic to stores to market their e-commerce brand—a distinct advantage over web-only merchants, Byrne says.

http://www.internetretailer.com/2013/01/24/overstock-boosts-sales-and-profits

 

I sold half my position today. The position became too big and the investment thesis has played out pretty much as I wanted. I would have liked to see a big short squeeze.

 

Good for you!  I would have liked to see the squeeze too.  ;D  Cheers!

[ASTA]

Well I got scared and sold my other half at 200% return yesterday that's enough of a return ;D

Now have 27% cash and more coming with dell soon as its 10%.

The question now is what to do with 38% cash in the coming months.

[Parsad]

Well I got scared and sold my other half at 200% return yesterday that's enough of a return ;D

Now have 27% cash and more coming with dell soon as its 10%.

The question now is what to do with 38% cash in the coming months.

 

Nibble on Apple and sit on the rest until something else comes your way.  We are sitting on 40% cash right now too!  Cheers!

[ASTA]

Thanks again for this little stock gift. Others helped as well Chou and MOI.

Well regarding the cash pile think that msft on a dip also sounds good we will see.

Cheers 

[Guest hellsten]

Thanks again for this little stock gift. Others helped as well Chou and MOI.

Well regarding the cash pile think that msft on a dip also sounds good we will see.

Cheers

 

Here's some advice from Warren and Charlie on what to do with extra cash:

 

I had a lot of money around. I make mistakes when I get cash. Charlie tells me to go to a bar instead. Don’t hang around the office. But I hang around the office and I have money in my pocket, I do something dumb. It happens every time. So I bought this thing. Nobody made me buy it. I now have an 800 number I call every time I think about buying a stock in an airline. I say, “I am Warren and I am an air-aholic.” They try to talk me down, “Keep talking don’t do anything rash.” Finally I got over it. But I bought it. And it looked like we would lose all our money in it. And we came very close to losing all our money in it. You can say we deserved to lose our money it.

http://www.buffettfaq.com/

 

Sounds like we should go to a bar and avoid airline stocks.

[ASTA]

Hellsten what I really need is a toll free phone number to talk me out of hpq and nok as I lost more then 60% on both ;D

Well have a empty whisky bottle on my desk so no bar for me something else perhaps go to gym and get my sixpack back.   

[valuecfa]

Noticed Chou has been doing some selling in past few trading days...

 

I got the time to read the conference call transcript, just now.  This stood out:

 

Justin Ruiss  — Sidoti & Company - Analyst

 

Very nice. My last question is - now that you have paid off the debt, and you are debt free, any ideas with cash what that would be used for?

 

Patrick Byrne  — Overstock.com - Chairman, CEO

 

At these prices I would start buying-in stock. That would be my preference, Jonathan, Steve Chesnut, what do you say. Not to that, but what would you do with more cash?

 

Steve Chesnut  — Overstock.com - SVP, Finance and Risk Management

 

Clearly the stock price where it is provides an opportunity. I think we also see opportunities to continue to whether it is technology enhancing the business as we have continue to invest, fundamentally investing in the business as we know it today to keep extending the reach.

 

Jonathan Johnson  — Overstock.com - President

 

I agree with that. I think we can spend our cash within the business in ways that will have nice ROI, and we always have projects on our list that we want to get done and not having to service debt will help us do that.

[Parsad]

Patrick takes a temporary leave of absence to deal with some cardiac issues.  Cheers!

 

http://finance.yahoo.com/news/overstock-com-ceo-taking-temporary-140100597.html

[Guest wellmont]

Thanks again for this little stock gift. Others helped as well Chou and MOI.

Well regarding the cash pile think that msft on a dip also sounds good we will see.

Cheers

 

Here's some advice from Warren and Charlie on what to do with extra cash:

 

I had a lot of money around. I make mistakes when I get cash. Charlie tells me to go to a bar instead. Don’t hang around the office. But I hang around the office and I have money in my pocket, I do something dumb. It happens every time. So I bought this thing. Nobody made me buy it. I now have an 800 number I call every time I think about buying a stock in an airline. I say, “I am Warren and I am an air-aholic.” They try to talk me down, “Keep talking don’t do anything rash.” Finally I got over it. But I bought it. And it looked like we would lose all our money in it. And we came very close to losing all our money in it. You can say we deserved to lose our money it.

http://www.buffettfaq.com/

 

Sounds like we should go to a bar and avoid airline stocks.

 

oh warren. the dirty little secret is he made a lot of money in US Air. :)

[mcliu]

I'm relatively new to this company compared to you guys, would be very helpful to get your thoughts on some of the questions I have.

 

1) What's the business model like? I noticed Byrne saying that OSTK shuffles more electrons than goods.. Does that mean they're more commission based connecting buyers to sellers that fulfill orders? If that's the case, why do they maintain a warehouse and inventory? Or would they first purchase overstocked products from the sellers, store them in their warehouse, and then re-ship the products?

 

2) What do you guys think of operating efficiency/competitive advantage? I was looking at the clip of their warehouse posted earlier and it seems like they're still using runners. I thought most large distribution centres have switched to robots (Kiva), etc?

 

3) Are they almost more of a logistic company compared to a true retailer/distributor?

 

Seems like the game is getting tougher as Amazon's keeping margins down while Brick-and-Mortars start to catch up in the online game.. Can we continue to see operational improvements at the company?

 

[mscotten]

I noticed that Steve Chestnut and Tim Dilworth have both left Overstock as part of the management shuffle announced earlier in the week.

 

On recent calls, Patrick was appeared to be very high on both these executives. Does anyone have any insight into why they left?

 

I hope this isn't the start of another bad year which inevitably seems to follow a good year at Overstock.

[Parsad]

I noticed that Steve Chestnut and Tim Dilworth have both left Overstock as part of the management shuffle announced earlier in the week.

 

On recent calls, Patrick was appeared to be very high on both these executives. Does anyone have any insight into why they left?

 

I hope this isn't the start of another bad year which inevitably seems to follow a good year at Overstock.

 

Both Sam Mitchell and Jonathan Johnson will be in Toronto, and both will be at our dinner, so someone can ask them this question.  So far, the changes they have made in the last year have been great, so this may be continued improvement...we don't know.  Cheers!

[Parsad]

Patrick Byrne returns to Overstock.com after some cardiac issues possibly related to cancer treatments earlier in his life:

 

http://finance.yahoo.com/news/patrick-byrne-returns-helm-overstock-130000915.html

 

I'm glad Jonathan will be added to the board.  Good to see him at our dinner this year as well!  Cheers!

[Guest hellsten]

Q1 2013 results are out:

http://investors.overstock.com/phoenix.zhtml?c=131091&p=irol-newsArticle&ID=1808187&highlight=

 

Key Q1 2013 metrics (comparison to Q1 2012):

Revenue: $312.0M vs. $262.4M (19% increase);

Gross margin: 18.9% vs. 18.1% (80 basis point increase);

Gross profit: $58.9M vs. $47.5M (24% increase);

Sales and marketing expense: $18.7M vs. $14.5M (29% increase);

Contribution (non-GAAP measure): $40.2M vs. $33.0M (22% increase);

G&A/Technology expense: $33.2M vs. $30.5M (9% increase);

Net income: $7.7M vs. $2.7M ($5.0M increase); and

Diluted EPS: $0.32/share vs. $0.12/share ($0.20/share increase).

 

Good to have Patrick back.