LUVU Back in the Buy Zone?

Posted on January 8, 2021 by Brad Steveson

If you have been looking to add LUVU shares to your portfolio, you may have groaned like me when on December 31st it suddenly popped from around $0.09 per share closing price on 12/30 to $0.16 per share on 12/31. Who expected that on New Year’s Eve? Not me. By 1/5 we hit a high of $0.17 per share. As I said in my previous post, I believe a case can be made easily for LUVU shares to be worth something in the 20c to 25c range per share, so the truly bargain price appeared to be gone from my point of view.

Since this is a tiny little company with less than a $10m market cap AND it trades in the OTC Markets, most days it’s trading volume is relatively low. Anecdotally I would say this stock does not get noticed often by investors. I had buy orders in for around $0.08 and $0.075 per share that were never filled before the pop. I was being patient, which is “smart”. Right? Never mind that I missed the run to $0.17 by holding out for one half a cent!

The sudden interest in LUVU seems to be fading over the past few days with the stock very briefly plunging to $0.08 per share (I missed it) before closing at $0.105 per share yesterday. I am watching more carefully this time because I plan to add shares with a move under $0.10. I still think the company has a good chance of attracting more sustained investor interest when the company reports fiscal Q2 ending Dec 2020 earnings. I believe the company is on track to earn $0.03c per share for the fiscal year ending June 2021 while beefing up their cash balance to $3m+ by then. That may become more obvious to other investors with the upcoming report, which should be delivered sometime in mid February.

Disclosure: Small position, and I may buy or sell shares within the next 72 hours.

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