If you are looking for a stock that is so cheap, and so blown out that it really has no place to go but up, look no farther than NWWV.
The company made some bad blunders in the first half of 2005. Their core business of a subscription based model which puts people in business on the internet was doing fine. Customer retention was an issue, but the company was on solid footing.
Then they decided to expand. They opened a eBay auction drop off service and a couple of other problematic subsidiaries. They borrowed a substantial amount of money to set up these subsidiaries, and ended up closing them and getting back to their core business.
The Q3 numbers were just horrendous, and the stock simply melted down. Poor performance combined with year end tax selling brought this one crashing down.
The stock is so oversold it really has no where to go but up, which doesn’t mean you should buy it. It only makes sense to buy it if the fundamentals have turned around.
As we learned in a press release which came out today, NWWV is back on track. They have enjoyed three months of positive operating income. The enrolled nearly 13,000 new members in December alone. In addition and perhaps more importantly, NWWV experienced a 46% increase in enrollment renewal. Customer retention has long been a challenge, and they are moving in the right direction. You can click here if you want to read the press release associated with the improvement.
Technically, there is not much to hang your hat on for this one. The stock is a pathetic picture of a full blown collapse. I can only observe that the stock is finally turning back up, and has broken a vicious downtrend line.
I don’t know what it will take to get this one trading back up more dramatically, but in light of the company’s dramatic turn in corporate performance, and year end tax selling being at an end, I believe the stock is ready to begin a rebound phase. I can’t predict the upside, but I don’t believe there is much downside.
Comments and questions are welcome.