EGGS has had a major run up from the lows a year ago. EGGS was at $5 a year ago, so it is up 60% or so here. So I'd say that the drop below the 200 day moving average is negative, but the only saving grace is that the 200 day moving average is RISING. It looks like it is having trouble finding its footing at even this 3-month low in price, so I'd say it has to go lower, perhaps to 7.5-7.0 to clear out the current batch of sellers.
Given the action of the internet commerce stocks as a group, EGGS has held up well in this recent BASHING, but the flip-side is that it also LAGGED terribly during the rally. EGGS remains at the very low end of the valuation range for the group. Low valuations usually accompany LOW CONFIDENCE in management. I guess ultimately we are going to have to wait until the next earnings report due in early August to see what the revenues are doing, and even then no one will likely care.
I personally enjoy the surplusdirect.com site and I frequent it instead of ONSALE's. I guess I enjoy investing in stocks if I enjoy using their services or products. Egghead was a staple for me when it was a storefront and now it is a staple now that they are on the internet. I love the auction process and feel that the internet auctions are going to be big business going forward and I love the GREAT DEALS. I was able to buy a great printer/copier for half of what it would have cost me through 1-800-TELSHOP. I love their service too, the company is CUC Int'l, now Cendant... You can try their service for $1 for 6 months and if you can't save 20%-40% off regular store prices, then I will be surpised.
You are right to mention that EGGS is not doing well technically and this may take a long time for EGGS to double from current levels. If you put your money in bonds, then your money will double in 12.4 years using 5.8% 30-year bond yield and the RULE OF 72. I suppose you could keep your money in a money market fund and earn 5% and double your money in 14.4 years (tax-deferred account, of course). I guess the best way to handle EGGS is carefully, slowly and try not to get impatient.
I don't like the fact that EGGS had some positive coverage and good revenues and the stock has been dropping ever so steadily since. When a stock can't rally on good news, then watch out... That has been the case for EGGS. |
