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Could Investors Clean Up With Bed Bath & Beyond?


Watch this company and others like it in 2010.

I've said before that I think consumers are going to be spending more on many things in 2010 than they did in 2009. I continue to believe that. And among the areas that could do the best are stores that sell merchandise for in and around the home.

My thinking is that this asset has largely been ignored by many for the last year and a half, primarily because of the recession and the job situation. Some of those neglected abodes could likely use a spring cleaning. This is why I'm paying attention to companies like Bed Bath & Beyond (BBBY).

Here are some of the things I like about the company, and some reasons I think the shares are worth a look-see now.

When it comes to the home, Bed Bath & Beyond offers an enormous selection of merchandise that appeals to both men and women at generally good prices. With Linens 'n Things out of its path, it has some breathing room as far as direct competition goes. (Although Target (TGT) and its home-related goods and appliances shouldn't be overlooked by anyone in my opinion. I'm a huge fan of the Minnesota-based company and have been for a while.)

2. On the earnings front, the estimate for the third quarter that's expected to be announced on January 6 is $0.43 That's up a penny over the last month. Not a gigantic jump, but the movement does catch my eye as a positive. Of course Bed Bath & Beyond has also beat estimates over the last four quarters, which is a trend I'm liking a great deal. My gut tells me there could be at least a few cents upside to the third-quarter estimate.

3. I'm not a momentum guy, but lots of people are -- particularly these days. And if the company does beat earnings and ends up making a new high, or if for some other reason the shares advance to a new high in the near-term, it could end up on the radar screens of many an investor at a time of the year when many folks are looking to deploy bonus money or proceeds from other transactions.

4. I'm going out on a limb here, but the $2.20-a-share estimate for next year may end up proving to be a little conservative. If its registers are ringing in a respectable way now, imagine how they might ring as the economy comes back.

Hey, have a great day!
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No positions in stocks mentioned.

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