Blue Nile Shares May Be Up A River -Barron's (NILE, TIF)
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Blue Nile (NASDAQ: NILE) reported a Q409 EPS of $0.35 and revs of 102.9 million, both missing estimates, and this makes it a prime candidate to sell from your portfolio according to a Barron's article yesterday.
The magazine said that some investors have sold the company short, believing that it could head as low as $35 per share due to waning demand and increasing competition in the jewelery market.
Blue Nile is expected to see revs of $349 with 70% of that coming from the sale of diamond engagement rings. The company also guided their EPS estimates to $0.14 - $0.16 per share, compared to the analyst estimate of $0.17.
The company's main advantage over brick-and-mortar's is that they do not carry inventory, they only source out when an order is placed.
Blue Nile is also expanding in to the realm of less expensive jewelery, including watches, pearls, and the like. International sales expansion has fared well for the company, as they now account for about 11% of total sales.
The company CEO, Diane Irvine, said that the company's priority in 2009 was to gain market share in a challenging economic environment, which was accomplished. The company, she went on, saw growth of 23% Y/Y in November and December, compared to SSS results for competitors that ranged from 12% to (12%).
Traffic results from compete.com saw a decline in every month of 2009, compared to increased traffic into retailers, such as Tiffany's (NYSE: TIF), websites. Compete.com sees Blue Nile controlling only 4.3% of the internet jewelery sales market.
A spokesperson for Blue Nile noted that the company is still open for business despite several competitors closing their doors throughout the year, boding well for their budding business. A short investor, however, sees a strong coordination between the decline in website traffic and declining sales.
One final thought is that company exec's have sold lots of stock over the past 12-months, many in pre-arranged plans. Executive chairman Mark Vadon reduced his position to 7.3%, and grossed over $14.3 million from sales, and is reportedly aiming to begin another e-commerce business. CEO Irvine sold $2 million.
Share's of Blue Nile are down 6.37% today, to $49.21. Volume is at about 132,000, which compares to the three-month average of about 191,000.
The magazine said that some investors have sold the company short, believing that it could head as low as $35 per share due to waning demand and increasing competition in the jewelery market.
Blue Nile is expected to see revs of $349 with 70% of that coming from the sale of diamond engagement rings. The company also guided their EPS estimates to $0.14 - $0.16 per share, compared to the analyst estimate of $0.17.
The company's main advantage over brick-and-mortar's is that they do not carry inventory, they only source out when an order is placed.
Blue Nile is also expanding in to the realm of less expensive jewelery, including watches, pearls, and the like. International sales expansion has fared well for the company, as they now account for about 11% of total sales.
The company CEO, Diane Irvine, said that the company's priority in 2009 was to gain market share in a challenging economic environment, which was accomplished. The company, she went on, saw growth of 23% Y/Y in November and December, compared to SSS results for competitors that ranged from 12% to (12%).
Traffic results from compete.com saw a decline in every month of 2009, compared to increased traffic into retailers, such as Tiffany's (NYSE: TIF), websites. Compete.com sees Blue Nile controlling only 4.3% of the internet jewelery sales market.
A spokesperson for Blue Nile noted that the company is still open for business despite several competitors closing their doors throughout the year, boding well for their budding business. A short investor, however, sees a strong coordination between the decline in website traffic and declining sales.
One final thought is that company exec's have sold lots of stock over the past 12-months, many in pre-arranged plans. Executive chairman Mark Vadon reduced his position to 7.3%, and grossed over $14.3 million from sales, and is reportedly aiming to begin another e-commerce business. CEO Irvine sold $2 million.
Share's of Blue Nile are down 6.37% today, to $49.21. Volume is at about 132,000, which compares to the three-month average of about 191,000.
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