Red Flag Alert – Don’t Get Sucked In...
Red Flag Alert – Don’t Get Sucked In...
Just because iRobot plunged, doesn't mean it's a bargain
It’s easy to get sucked in by a stock that has fallen by half, especially if it makes a well-known consumer product...
We’ve seen this before, as individual investors flock to the bludgeoned stocks of companies they know and maybe even use, like George Foreman Enterprises, Tupperware or maybe the best example ever, Bed Bath & Beyond.
As appealing as each one might have been to loyal and enthusiastic customers, they all flamed out… as businesses and stocks.
As investors in those companies learned the hard way, there’s the brand... and then there’s the business.
Great Story, Not-So-Great Business
Which bring us to iRobot ($IRBT), whose Roomba robotic vacuum created an innovative new niche in housewares.
It has been great story, and everybody knows the brand. But its stock has been a tug-of-war between the bulls and bears almost from the start – with both sides claiming victories along the way...