Essay Bed Bath And Beyond Inc.

Essay Bed Bath And Beyond Inc.

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Abstract
Bed Bath and Beyond is a home décor retailer established in 1971 and began selling its shares in 1992 on the NASDAQ stock market (Corporate Responsibility, n.d.). Today its common stock is trading at $41.19 (Bed Bath & Beyond Inc. Common, 2016), 49% below the “March 2014 closing peak of $80.48” (Lara, 2016). This analysis will explore Bed Bath and Beyond Inc.’s current situation as it relates to the stock market, past performance, and how it will compete for future growth, to determine if we should add this company to our portfolio and what the expected rate of return should be if our hedge fund decides to invest.

Analysis of Bed Bath & Beyond Inc.
Bed Bath & Beyond’s stock prices have been steadily declining since the second quarter of 2015 (Table 1) and are currently trading at $41.19 per share, only pennies above its 52 week low of $41.15 (Bed Bath & Beyond Inc. Common, 2016). This company is best known for using its blue and white 20% coupon, and according to USB analysts, the “redemptions have squeezed the retailer’s margins for the past 15 quarters” (Moise, 2016).
Table 1 Stock Chart for Bed Bath & Beyond

Bed Bath & Beyond Inc. (BBBY) Stock Chart. (2016, October 07). Retrieved from http://www.nasdaq.com/symbol/bbby/stock-chart?intraday=off

Amazon and Wal-Mart are offering similar home décor items for sale online, and competing for customer loyalty through membership programs charging annual fees for premium services that include free shipping to keep customers loyal (Lara, 2016). Customer’s buying habits are shifting from brick-and-mortar stores. However, this company could easily redesign its stores to showcase or showroom the items its sells while directing the majority of purchases are generated onli...


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... week low of $41.15 (Bed Bath & Beyond Inc. Common, 2016). It has been a firm that has shown small but steady increases in sales and revenue for the past four years (Appendix, Bed Bath & Beyond Inc., 2016). Although this company’s net income growth has been declining over the last three years its gross profit margin is higher than industry the average at 38.17% (Bed Bath & Beyond Inc., 2016). Overall the firm has maintained respectable net profits only recently increasing its debt in recent years to repurchase stock and acquire a firm to help it compete in the market, a healthy balance between debt and capital. For these reasons, our firm should purchase 2500 shares of NASDAQ stock symbol BBBY today and take advantage of the December ex-dividend of $0.125 and hold the stock until a minimum of share price of $62.00 for a potential of 50% return on our investment.

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