Regis equity raise offers lessons, stock still a sell

Filed under: Competitive strategy, Stocks to Sell

Paul Foster says that options activity in salon company Regis Corporation (NYSE: RGS) indicates the stock is likely to have non-directional price movements over the short-term, following the company's announcement of a stock and debt offering. That could very well be true, but I think the short-term is overanalyzed, and the long-term story here is much clearer -- and Regis offers two important lessons about how to better-analyze the financing and operations of a company.

I was first introduced to Regis about a year ago, when the stock was part of a portfolio of about 35 positions I inherited responsibility for. As I went through the holdings and segmented them out into categories of attractiveness, Regis was consistently ranked near the bottom. The industry itself was unattractive, and the way the company implemented its strategy seemed to leave it particularly vulnerable to adverse financial markets.

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Regis equity raise offers lessons, stock still a sell originally appeared on BloggingStocks on Fri, 10 Jul 2009 17:00:00 EST. Please see our terms for use of feeds.

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