The past year has seen no shortage of controversial stocks.
Hedge fund managers have culled their skill at taking positions, staging huge publicity campaigns, and generating a lot of discussion around the stocks they decide to bet on with high conviction – or bet against.
Other stocks are controversial because their businesses are particularly consumer facing, which makes their brands all the more recognizable to the average retail investor, looking to get in on unfolding trends in retail or social media.
As a result, quarterly earnings reports from these companies are usually widely anticipated.
Best Buy (BBY)
Sector: Electronics Retail
52 Week Stock Performance:-41.2 percent
What's Going On: Best Buy has had a rough go of it lately, and its same-store sales numbers reflect that. However, there may be hope for a turnaround – this holiday season, Best Buy finally logged U.S. sales growth figures that weren't negative (though they were flat). The company lost a key executive in December, and former CEO Dick Schulze continues to attempt a buyout.
Bull Case: Shares could get a lift if new CEO Hubert Joly can execute a turnaround, or if Schulze actually succeeds in taking over the company. Furthermore, if sales continue to beat expectations, investors could come back to this stock.
Bear Case: Best Buy is experiencing troubles facing the entire brick-and-mortar industry – like showrooming – and deteriorating cash flows could make it less likely that Schulze is successful in buying out the company.
Groupon (GRPN)
Sector: Internet
52 Week Stock Performance: -72.7 percent
What's Going On: Groupon's stock was under pressure early in 2012 after its accounting firm said it had weak internal controls. A number of companies that use the service have warned of eye popping losses and higher than expected returns have weighed on results. Now, the company is shifting away from local deals to its newer "Groupon Goods" business.
Bull Case: BofA says shares may rise if Groupon can "successfully diversify away from local deals, and goods gross margins may improve."
Bear Case: The problem with Groupon Goods is that it's a low-margin business – whereas local deals were high-margin. BofA says this could create uncertainty surrounding earnings as Goods becomes a larger share of Groupon's business.
Salesforce.com (CRM)
Sector: Internet
52 Week Stock Performance: +67.4 percent
What's Going On: Despite its inability to turn a profit and the large amount of short bets against the stock, shares of Salesforce.com keep going up, leading many to question whether it's overvalued. However, it's a big name in cloud computing – a trend investors love.
Bull Case: The company is growing subscribers and revenues at a steady clip and could be a big beneficiary of a structural shift toward cloud software.
Bear Case: The stock is overvalued and the company is unprofitable. Management could run into trouble attempting to manage such rapid growth going forward.
See the rest of the story at Business Insider
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