By: Jim R. – Warrior Trading
After a recent 60 Minutes news special on Lumber Liquidators (NYSE: LL) and their report alleging dangerously high levels of the carcinogen formaldehyde in its China-sourced flooring products shares are down from a high of $69.99 in February 2015 to a low of $27.15 in March 2015.
Many of us may have been initially angry ,and may still be, at the Company for subjecting us (and our pets) to chemicals above standards set in place by regulators.
Others, however, like us stock equity traders and /or investors have found a source for income. If you believe in buy low-sell high, this recent negative attention has provided and may still provide an opportunity for profit.
All told, lousy p.r. and weak earnings and sales have pushed North America’s largest flooring retailer down 55% year-to-date and 73% from its March 2014, 52-week high.
Going forward, if Lumber Liquidators can prove no wrongdoing, offer reimbursements and comply overall with regulators, this flooring giant may have truly been “floored” and may rise again.
investment newsletter Citron Research says the selloff “is largely overdone.”
A chart below shows bottoming action with increasing volume-usually indicative of a bottom forming.