What Can You Buy With Crypto

Since you lot came here looking for value stocks, I’ll try not to waste your fourth dimension with simply borderline value investing opportunities. To the contrary, I believe online marketplace
eBay
(EBAY
0.22%)
and article of furniture company
Lovesac
(Love
v.04%)
are downright cheap right now, and the numbers dorsum this upwardly.

I also considered furniture store
RH, automotive retailer
Advance Motorcar Parts, and OLED technology companyUniversal Display Corporation
for this article. Even so, while I exercise believe those offer good value likewise, eBay and Lovesac both trade under $100 per share, whereas the others don’t.

Hither’southward why eBay and Lovesac are good value buys with those Benjamins.

1. eBay: $46.60 per share

eBay isn’t a one-stop online shop for everything, and it likely never volition be. But information technology’due south still a very relevant platform, excelling in a number of key categories. Management calls them “focus” categories. For perspective regarding its relevance, eBay has over $76
billion
in abaft-12-month gross merchandise book (GMV) — the sales value of the products sold on the platform.

eBay’southward management intends to maintain its relevance by doubling down on what its buyers want. For case, eBay is quite the car-parts retailer, and lately information technology’s been elevating its presence in this market place by sponsoring related events and shows. It also acquired a company chosen myFitment to better listings on the eBay platform, ensuring vehicle-parts information is uploaded correctly.

Another case of an eBay focus category is collectibles. This category includes trading cards. And trading card sales volume has more than than doubled for eBay since 2019. The company is improving its offerings with the launch of eBay Vault — a service for high-value collectibles that makes it easier to shop, authenticate, and merchandise these items. It’s too recently caused trading-bill of fare marketplace TCGplayer.

I believe eBay will remain a solid player inside its core categories for the foreseeable future. And by facilitating these transactions for third parties, the company enjoys high profit margins — its gross margin is well-nigh 73% year to date.

A quick annotation on value stocks — a cheap valuation is ofttimes indicative of market pessimism. In eBay’s example, its active buyers brutal 11% year over year in the third quarter of 2022 to 135 1000000, and GMV also fell 11% to $17.7 billion. This leads some to believe eBay’south business organization is dying. But as already pointed out, it remains strong in core categories, and I expect that to keep.

eBay has earned about $2.v billion in income from operations over the by 12 months — its market capitalization is only 10 times larger than this, which is inexpensive.

Direction is repurchasing shares and quickly scaling upwards its dividend, as the nautical chart below shows — ii priorities going frontwards that can drive market-beating shareholder returns. Therefore, it doesn’t need to grow revenue to render more capital letter to shareholders, it merely needs to hold its ground. And I believe that will be a likely outcome for eBay.

EBAY Dividend data by YCharts

2. Lovesac: $27.69 per share

Equally already mentioned, value stocks typically bake in cynicism. That’s the example with Lovesac stock, and for good reason. The visitor sells high-quality but loftier-priced beanbag chairs and sectional couches. And this business concern doesn’t provide the company with recurring revenue.

To be fair, eBay’southward revenue isn’t recurring either. But its users are far more than likely to make multiple purchases in a yr than Lovesac’s customers. After all, you can but purchase so many couches for your home.

To its credit, Lovesac’s revenue growth is incredible. In fiscal 2022 (ended on Jan. thirty), its revenue jumped 55% from financial 2021. And through the first two quarters of financial 2023, the company has generated $278 million in net sales, up fifty% from the comparable period of financial 2022. The growth is impressive — but therein lies the risk.

Investors question whether Lovesac’s sensational growth is sustainable. Management appears to question information technology too. In its nearly recent conference call, management said that “Nosotros are non providing formal guidance” because it sees a wide “range of potential outcomes.” It’s difficult to predict how sales for premium-priced furniture will fare during a slowing economic system with high inflation.

Lovesac stock has already jumped 38% from its recent depression, but it’due south withal dirt cheap. The visitor has earned $44.four meg in trailing-12-calendar month cyberspace income and has a market cap of $419 meg. This means its price-to-earnings (P/E) ratio is less than x.

For comparing, the P/East average for the
South&P 500
is currently nigh 20 — Lovesac’south valuation is, therefore, roughly half that of the market’s average.

LOVE PE Ratio information by YCharts

The good news for Lovesac is that it estimates it’southward merely achieved 2% market share, at most. Therefore, it could double sales and still have a small piece of the market, which makes the possibility await achievable.

Moreover, management has roughly doubled its available inventory over the past year in anticipation of future demand. But Lovesac’s merchandise doesn’t change much year to year. Therefore, even if sales slow in the near term, information technology can patiently hold trade and sell later at full price when need rebounds.

For these reasons, I see Lovesac equally a low-adventure opportunity even if sales weaken in coming quarters.

Of these two stocks, eBay is the 1 I’d purchase today. Investing — even value investing — is still almost thinking long-term. I have zippo confronting Lovesac and would even consider ownership information technology at some point. But I’m far less confident at this moment about Lovesac’s staying power.

By dissimilarity, since it’southward been around for over 20 years, I strongly believe eBay has washed enough to stay live at least throughout this decade, generating robust cash flow and rewarding shareholders forth the way.