This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Take Profits in These 2 Companies Before Earnings

Stocks in this article: DIS GRPN

GRPN Chart GRPN data by YCharts

Groupon operates as a local commerce marketplace that connects merchants to consumers by offering goods and services at a discount in North America and internationally. The company sends daily emails to its subscribers regarding discounted offers for goods and services that are targeted by location and personal preferences.

52-Week Range: $2.60 to $14.93

Price To Book: 5.2

Groupon is anticipated to give us a repeat of last year's performance in this year's first-quarter earnings after the market closes on Wednesday.

The consensus estimate is currently between a loss of 1 cent and a profit of 2 cents a share, depending on the source. In the first quarter of last year, Groupon's bottom-line per share was 2 cents. Estimates from analysts range from a low of losing 2 cents per share up to the highest estimate of a profit of 5 cents per share.

Analysts are more or less side-stepping this one like a politician dancing the Washington two-step. A hold can mean everything from "I want to rate it a sell but that wouldn't be good for business" to "I have no clue" -- 16 out of 24 analysts rate Groupon a hold. Three recommend this company as a buy and five recommend selling.

Unlike Disney, Groupon hasn't performed well for investors who bought before the second half of 2012. As a result of the stock's dismal performance, the previous CEO and founder, Andrew Mason, stepped down earlier this year. In what is one of the most memorable resignation letters I have ever read, Mason displayed a rare level of honesty and humility in the corporate world.

I find a bullish argument for Groupon elusive. While I'm not short and wouldn't short the company primarily out of takeover risk, it's anything but surprising to see short interest over 15% of the float. I am almost exclusively a short-seller, and I can say with confidence that shorts don't enjoy holding a short position with this much short interest.

In order for short-sellers to hold positions with a small-priced ticker, they require a high confidence level the company is significantly overvalued by investors.

In other words, the smartest minds are screaming at the top of their lungs that Groupon is overpriced. They could be wrong, but are usually spot on. GRPN Revenue Quarterly Chart GRPN Revenue Quarterly data by YCharts

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

2 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs