Is Bed Bath & Beyond (BBBY) Stock Rally Sustainable?
4:52 pm Thursday, June 03rd, 2021
The ‘meme stocks’ phenomenon that was unleashed on the markets earlier on this year by retail investors is surely going to go into the annals of investment history. It seemed to have died down after the frenzy earlier on this year but the rally in some of the well-known ‘meme stocks’ is now back.
Most of the stocks which have recorded gains recently do not belong to fundamentally strong companies but Bed Bath & Beyond (NASDAQ:BBBY) might actually be an exception to this rule. Over the course of the past month, the Bed Bath & Beyond stock has gone up by 50%.
When it comes to these meme stock rallies, investors need to remember that most of these rallies are like bubbles and a crash can come any time. Most investors on Reddit maybe busy talking about the possibilities of turnarounds at many of these companies and much of that is merely speculation.
However, a turnaround is actually going on at Bed Bath & Beyond at this point and if the company is successful in this operation then it could lead to sustained growth over the long term. The brick and mortar retailed had struggled to sustain its business through heavy discounts.
However, a new management has decided to turn it around by switching the company’s focus into becoming an omni channel destination for all sorts of home goods. To that end, Bed Bath & Beyond has revamped many of its stores, optimised its real estate holdings and finally invested strongly into e-commerce.
These are major changes for the business and the results have already started showing up in the quarterly reports. In each of the previous three quarters, the company has managed to grow its sales and that is a massive development. The turnaround was ushered in by the company’s new Chief Executive Officer Mark Tritton, who had previously worked at the retailed Target. Despite the current meme stock status, Bed Bath & Beyond could be a stock that might have long term value.
