Groupon, Inc (GRPN)

This is an enigma wrapped up in a riddle. The stock is now at one third of where it peaked at. It is trading at just 70% of sales, so it looks appetizing. For them to continue to grow their business, it is going to require a lot more spending, and he is still not convinced it is the type of business where competitors cannot come in at will.

Would put this is a Junior player in the whole social group and would question if it had legs to live into the future. Did a comparison of this versus Google (GOOG-Q) and found this was down 40% year to date, while Google was down only 5%.

Would stay away from this. Thinks they are trying to reinvent their business model and salvage what they can. You just don’t need to be there. When a growth stock breaks its trajectory and breaks its business model and is no longer growth, you want to stay away from it, at least for 2 years, but 5 years is probably a better rule of thumb.

(Market Call Minute.) No barriers to entry in this business and there are new competitors coming up every day. Wouldn’t go near it.

Doesn’t buy IPOs because most of them are down within a year. So many companies came into the space that he couldn’t understand why anyone would buy it. He really has difficulty with the people who were selling it. Prefers One Spout. A lot of disillusionment with this sector.

Chart shows it has been in a downtrend since April. This would be bottom fishing. If you are interested in this, study the fundamentals. You want to see volume start to increase. The sector itself is favourable.