Shares of Coinstar (CSTR) have taken a nosedive over the past two months. The stock has been in a free fall after releasing some disappointing earnings news a few weeks ago. Investors abandoned ship and sold the stock for a variety of reasons. Today, I would like to take a look at shares of Coinstar to see if the company is a value stock or a value trap.
Let’s start by looking at the history of Coinstar.
Coinstar’s Background
Coinstar is the company with those green interactive kiosks that let you convert your change into cash for a fee. You will often find these kiosks at your local grocery store. This has actually become a smaller part of Coinstar’s business as the company derives the largest portion of its earnings from DVD rentals. You have seen Coinstar’s DVD kiosks at your local grocery store, convenience store, and McDonald’s under the name Red Box.
Coinstar’s Stock Crash
The stock has been absolutely slaughtered over the last two months losing nearly 38% of its value. Back on December 10, 2010 Coinstar traded at $66.62. Today, February 10, 2011 Coinstar trades for $41.75 a share. Investors started dumping the stock on January 13th. Coinstar dropped from $54 a share to $41 a share. Why the drop?
The company announced that it would miss its forward earnings projection by a mile. Coinstar was expected to earn between $415 million to $440 million next quarter. The company is now expecting revenue totals of just $391
Complete Story »
Sanaa Lathan Ana Beatriz Barros Maria Menounos Shakira Leslie Bibb
No comments:
Post a Comment