Yahoo!, eBay,

Interesting to note: All three web giants hit their 52 week lows today; Of the three, I find eBay intriguing — especially if we slow down.

That said, there is never a reason to buy a stock making a 52 week low. Never.

Discuss amongst yourselves . .  .

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  1. emd commented on May 18

    falling knives everywhere….. LOOKOUT!!!!!!!!!

  2. Robert Cote commented on May 18

    The problem with herd mentality is that even the health animals get gored in the mêlée. eBay is also so exposed to predation that I’m not interested. I see all the local newspapers working the same territory so I don’t see any pricing authority in their business for bigger ticket items and I see resistance to price increases for the small and volume items. Remember the revolt over the new store pricing tiers last year was it?

  3. justin commented on May 18

    I have been thinking about a EBAY AMZN pair trade for the last month or so. The relative valuations EV/06 EBITDA EBAY 17.3 AMZN 19.9; EV/07 EBITDA EBAY 14.0 AMZN 15.7. So AMZN is at a 12-15% premium with similar growth rates. On a P/E basis, there is an even bigger gap. There is a strong case that EBAY should be at a premium to AMZN. AMZN has a much worse profitablity and competition. I have never understood why a retailer (AMZN) gets comp’ed to a marketplace (EBAY) and a media company (YHOO). AMZN should be evaluated vis a vis TGT BBUY WMT BKS, etc.

  4. Bastiat commented on May 18

    That is unless you wanted to make 6.25% today.

    Just kidding. I know…fear and greed.

  5. Joe Jackson commented on May 18

    For the uneducated masses trying to learn about stocks … why wouldn’t you buy at a 52 week low? Is it that you don’t know how far it’s going to drop? Aren’t you supposed to buy low, sell high?

  6. Bynocerus commented on May 18

    Exactly Joe – you never know how low something will drop.

    I will share that I bought MRK very very close to its 52 week low last yeark, but I had a sell stop in there pretty tight in case I was wrong. I had been wrong earlier looking for a double bottom much higher, and it was a case of the second mouse getting the cheese.

    What would you do without sell stops?

  7. emd commented on May 18

    “never catch a falling knife”……..

    better to wait for the stock to bottom and resume an uptrend….. how many 52wk lows could you have bought in ENE and LU all the way down to zero (or close to it).

    i often struggle with the opposite affliction…. i love to try to pick tops for shorting. that’s a losing game as well.

  8. me2200 commented on May 18

    I find this interesting.

    eBay has 1800 listings for RVs. Most aren’t getting very many bids or the bids are way below the “Buy it Now” prices.

    eBay might get an awful lot of listings as the economy slows down. How many of those actually sell might be another story. What else is the middle class going to do with the stuff it needs to hock to get out of debt ?

  9. Mark commented on May 18

    Well this is interesting from the point of market psychology. I would have expected the bulls to want to hold serve here and now the bears are growling again. Dow down 35…..

  10. Mark commented on May 18

    I have to say…. WHAT THE HELL HAPPENED IN THAT LAST HOUR? 3pm. Bombs away! Did everyone finally get the Bernanke and Flacker comments? Figure out that the bond market was saying “Hello we have inflation so the short end is going higher but we don’t think the long end should because we have a clear slowdown in the economy coming faster than ya’ll think”?

  11. wilburpup commented on May 18

    At today’s close of 29.64, EBAY has fallen 50% from its all-time high of 59.21. That’s a standard Fibo retracement and reason enough for technical-based traders to buy.

  12. The Big Picture commented on Jul 21

    Want to Buy Stocks Making 52 Week Lows? (Don’t)

    Some readers criticized the never buy a stock making a 52 week low statement made previously in this space. I strongly believe that it is solid advice. To reiterate why, stocks in down trends tend to stay in downtrends for much longer than m…

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