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Blue Nile is a major producer of |
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conflict-free diamonds and jewelry. |
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Released on Wednesday, November 30, 2011, 9:00 PM ET
Pittsburgh, PA (SpeculatingStocks) - Did you do something stupid recently? Has she put you in that proverbial ‘dog-house’? Or do you just want to surprise her this Christmas with that perfect gift that says “Thanks” or “I love you.”? Well what better to get her than diamonds. Sorry, did that sound a bit like a cheesy commercial getting you to buy diamonds? Well it was, and if it worked, then this company is definitely a pick to look into.
Blue Nile, Inc. (NASDAQ:NILE) is a major producer of conflict-free diamonds and jewelry apparel. Recently in the month of November, NILE took a nose dive in extra day trading closing November 8th at just over $48 per share and reopening at around $35 per share. These drastic changes came as a result of decreased Q3 earnings reports—but we think this stock could be really cheap at its current price of $37.99 per share (4:00 PM EDT, November 30th, 2011).
The annual earnings of NILE last year came in around $0.94 per share, while after the Q3 earnings report the total current earnings are $0.49 per share with an additional earnings of $0.41 per share as based off of last year’s earnings. This brings the total estimated earnings per share to $0.89 per share for the 2011 FY. Currently this would cause the P/E to be around 38.88, but in the long-term, there is reason to believe this company might rebound along with it stock, so why not get in, while the getting’s good?
NILE’s financials seem relatively stable: holding a current ratio of 1.68 and over $40 million in cash. The company could pay for four-fifths of its total debt with the cash on hand, while netting the rest with other current tangible assets, such as inventory. Nile has also regularly increased its retained earnings on an annual basis for quite some time.
MACD indicators show that the company’s recent trough in price seems to be coming to an end, perhaps it will rebound with a nice growth here in the near future. Fast Stochastic indicators concur with the MACD, providing several over-sold indicators for NILE. Blue Nile provides a 43% return on equity and has a small-capitalization status with a corporate market capitalization around $515 million, along with nice volume in the stock, around 303 thousand shares per day, to ensure than you can get in and out, you could be looking at buying that diamond ring for the holidays—and maybe getting yourself out of the dog house too.
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