Bed Bath & Beyond Plunges

Last Friday, shares of Bed Bath & Beyond (BBBY) dropped 12%. They missed earnings by a mile and same-store-sales growth was terrible. This is difficult for me to see. I try not to let my feelings get in the way of investing, but it’s hard to see a company I liked for such a long time fail so badly.

Bed Bath & Beyond was on our Buy List every year until I decided to drop it from this year’s list. It certainly looks like I made the right call. In fact, I probably held on too long.

This is especially hard for me because BBBY used to exhibit all the signs of the stocks I like. It was an Eddy stock if there ever were one. They had strong cash flow, low debt, solid margins and a consistent operating history.

The stock was actually a big winner for us for a few years. Starting in 2012, BBBY began lagging the market. At first, I dismissed the slide as a short-term move. I gave BBBY the benefit of the doubt. Then I saw that the problems were severe and eventually let it go.

The lesson for investors, especially me, is that good stocks can turn into bad ones very quickly. Selling a position should be completely unemotional.

Posted by on June 27th, 2017 at 10:13 am


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