Bed Bath & Beyond Wakes Up, But The Chart Suggests Staying Put Until Mid-Year

Summary:

• Bed Bath & Beyond Inc. BBBY soared 21 percent on Tuesday and another 2-3 percent in the days since, after activist investors announced plans to replace the board and management.
• While we do see further upside later in the year, there is likely a better buying opportunity coming.

Bed Bath & Beyond Stock Weekly Chart

A group of three activist investors announced their intention to lead an effort to elect a board in favor of reform. The objective is to sell underperforming assets. The group who collectively owns a 5 percent stake is composed of Ancora Advisors, Legion Partners and Macellum Advisors.

Bed Bath & Beyond explained in a statement that, “We asked on several occasions for ideas for improving our business but they instead they chose to attack and provide their intent to nominate directors to take over the full Board.”

In analyzing the company's market cycles, shares now appear to be late in the rising phase of the current cycle. The current upside move has improved the patterns, overall, with a base being built. We believe the bulls would be better served by waiting for the next cyclical corrective phase to complete, giving a more favorable entry in the May time frame.

Related Links:

Bed Bath & Beyond Responds To Activist Battle, Says It's Already Addressing Concerns

Bed Bath & Beyond Boosted By Activist Battle, Analyst Upgrade