5 WallStreetBets Stocks Gaining in August

1. Bed Bath & Beyond Inc. (NASDAQ:BBBY)

Number of Hedge Fund Holders: 15

Share Price Gain in the Last Month as of August 12: 154.92%

Bed Bath & Beyond Inc. (NASDAQ:BBBY), an American retailer of bath and body products, has been one of the most popular trades among Redditors as of late. The stock has gained about 155% in the last month amid the meme stock frenzy. On August 9, Baird analyst Justin Kleber downgraded Bed Bath & Beyond Inc. (NASDAQ:BBBY) to Underperform from Neutral with an unchanged price target of $4. The shares have climbed 148% since July 27, the analyst told investors. The analyst said the rally has been “driven by non-fundamentally focused market participants”. With market share losses increasing and Bed Bath & Beyond Inc. (NASDAQ:BBBY) “burning cash,” the stock’s fundamental risk/reward looks unattractive, added Kleber. 

Among the hedge funds tracked by Insider Monkey, John Overdeck and David Siegel’s Two Sigma Advisors is a significant stakeholder of the company, with 915,474 shares worth $20.6 million. Overall, 15 hedge funds were bullish on the stock at the end of March 2022, compared to 17 funds in the preceding quarter. 

Here is what Miller Value Partners Income Strategy has to say about Bed Bath & Beyond Inc. (NASDAQ:BBBY) in its Q2 2022 investor letter:

“Bed Bath & Beyond 5.165% 08/2044 declined 67.4% in the period. Bed Bath & Beyond reported 4Q21 sales of $2.05 billion, down 22% Y/Y, missing consensus of $2.08 billion. The company lost $0.92 per share in the quarter, down from 4Q20 adjusted EPS of $0.40, below analyst expectations for EPS of $0.03. Management noted supply chain disruptions and the Omicron variant led to inventory availability challenges, which had an estimated sales impact of $175 million, or 8.5% of 4Q21 net sales, and a 400 basis points (bps) Y/Y contraction in 4Q21 adjusted gross margin to 28.8%, driven by product cost increases and higher than anticipated freight and shipping costs. Additional headwinds in the quarter included general weakness in the retail segment, highlighted by big earnings misses from Walmart and Target, along with Moody’s downgrading Bed Bath’s corporate family rating from B1 to B2. The ratings agency cited increased execution risk of the company’s strategic turnaround initiatives and ongoing supply chain issues weighing on the company’s market share and profitability going forward as the main drivers for the downgrade. However, Moody’s maintained a stable outlook for the retailer due to the financial flexibility provided by the company’s liquidity position and low level of funded debt.”

You can also take a look at 10 Buy-The-Dip Restaurant Stocks to Invest In Now and 10 Best Stocks For Inflation According to Redditors. 

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