The Casual Investor
Investing tips for those who are not yet rich
Stock Pick 12/21/2007: RBI

Today I picked an apple from the loser's basket.  RBI was down about 24% today.  There's a specific set of conditions for picking a daily loser:


1) The fundamentals have to be decent.


2) The reason for the sharp drop has to be unrelated to the company's business.


3) There has to be a reason for the stock to go up.


In the case of RBI: the fundamentals could be a lot better, but they're salvageable.  Also, RBI is a microcap with excellent sales.  The reason the price was depressed is because a class-action lawsuit was dismissed yesterday.  This is good for the company, but bad for all the shareholders represented by the lawsuit.  They probably all sold their stock in disgust, which would explain the rapid nosedive.  However, this means the company is coming out of long-running difficulties, just in time for the market as a whole to pick up again.  I think RBI is going to increase in value from this point.


2007-12-22 04:31:51 GMT


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