B.O.S. Better Online Solutions (USA) (NASDAQ: BOSC)
B.O.S. Better Online Solutions is having an incredibly rough start to the trading session today. In fact, the stock is down well over 10%. However, I have to say that I’m not concerned in the least. In fact, after the big gains we saw yesterday,I was expecting this to happen, just like I’m expecting to see more exponential growth out of the stock. Today, we’ll talk about why yesterday was such a strong day for the stock, why we’re seeing declines today, and what we can expect to see from BOSC moving forward.
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Why BOSC Climbed Yesterday
B.O.S. Better Online Solutions had an incredible day in the market yesterday, and for good reason. Yesterday, before the opening bell, the company reported its earnings for the first fiscal quarter. In the quarter, the company generated a profit of $314,000, which shows incredible growth over the $33,000 we saw in the same quarter a year ago. Revenue was also up substantially. During the first quarter, the company generated revenue in the amount of $8.1 million. This proves a 38% year-over-year growth rate. Following the strong first quarter, BOSC is expecting to see incredibly strong revenue and earnings growth throughout the rest of the year as well.
Why The Stock Is Down Today
As mentioned above, B.O.S. Better Online Solutions is having a rough day in the market today. Currently (11:16), the stock is trading at $3.45 per share after a loss of $0.62 per share, or 15.23%, thus far today. As a result, investors are starting to ask, “Should I be worried about the declines?” In my opinion, the answer is no! In fact, when you look at the reason for today’s declines, it becomes clear that it really isn’t concerning at all.
The reality is that price movement in the market tends to happen through a series of overreactions. Yesterday’s news from BOSC was overwhelmingly positive, and we saw an overwhelmingly strong reaction. However, it can be argued that while the stock deserved growth, the news wasn’t strong enough to support doubling the stock’s value. When these types of things happen, we tend to see a slight correction in the value of the stock in the trading session following the exponential growth. This correction brings the value of the stock down to a more sustainable rate before growth can continue. In my opinion, that’s exactly what we’re seeing from B.O.S. Better Online Solutions today.
What We Can Expect To See Moving Forward
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from BOSC. The reality is that the company has proven its ability to grow. The strong year-over-year growth experienced in the first quarter is expected to continue throughout the year. In the short run, investor excitement is likely to lead to a strong recovery from today’s declines. However, the gains we see in the short run are nothing compared to what I’m expecting to see in the long run. As BOSC continues to produce stronger than expected growth, investor excitement is likely to lead to more dramatic gains in the value of the stock moving forward.
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What Do You Think?
Where do you think BOSC is headed moving forward? Let us know your opinion in the comments below!
[Image Courtesy of Pixabay]