Stock to Sell #1 – eBay (EBAY)
eBay (EBAY) is one of the world’s leading e-commerce sites. However, I listed it as one of my Stocks to Sell in September, when it was trading near $53, saying “acquisitions and expansion have limited growth for several years. Its entrance into developing markets has been unsteady, and regulatory and legal matters could have a negative impact on future earnings.”
In the past 60 days, consensus estimates for 2014 earnings have been reduced $0.04 per share to $3.14. Trading at 19 times this year’s estimated earnings and more than 16 times next year’s, EBAY is no bargain,
Technically the stock has broken down from the bearish rounding top noted in September, and has sliced through its 50-day moving average followed by a weak rebound in October. A series of high-volume liquidations mark the decline, and MACD is now in bearish territory. Sell EBAY on this slight rebound above $50.