Stocks to Sell: Bed, Bath & Beyond (BBBY)
Retailers are slogging through one bad month after another and few names seem to be immune. From discounters like Walmart (WMT) to specialty chains like Abercrombie & Fitch (ARO), consumers just aren’t spending like they used to.
The terrible sales environment is clobbering shares in Bad Bath & Beyond (BBBY). The stock is down 25% for the year-to-date. Unfortunately for BBBY, the weakness only leads to more weakness, as faltering technicals snowball to drag shares down further.
If there’s any price momentum in Bed Bath, it’s to the downside. BBBY stock is 24% below its 52-week high, 4.4% its 50-day moving average and 14% below its 52-week moving average. Additionally, there’s no hope to be found in BBBY’s relative strength indicator, which stands at 39 vs. an industry average of 50. Sure, it’s getting toward being oversold, but with good reason. Don’t expect buying on valuation anytime soon.
Most damning is that this is a seasonally weak period for Bed Bath even in good years. A decades worth of data suggests that BBBY stock will lose something like 4% in June and another 1.7% in July.
The fundamentals were obviously going against BBBY. With technicals in the same camp, BBBY joins our group of stocks to sell.