Is Ollie’s Stock a Solid Long Term Investment?

Ollie's Stock

Having a long term investment is one way of spreading your funds over a long period as they appreciate in value. Unlike savings, you get to witness your funds gain value over time, and it is a sure way of attaining financial security. There are several fronts for investing, and one that is gaining much traction presently is investing in the stock market. There are several companies with their securities listed on the stock market, one of them being Ollie’s Bargains. It is an American company that specializes in excess inventory. To weigh how better this company’s stocks are for a long term investment plan, we will first look at its background.

Ollie’s Bargains Background

According to its website, Ollie’s was founded in 1982 in Mechanicsburg, Pennsylvania. It was the combined effort of four founding fathers, Harry Coverman, Mark Butler, Mort Bernstein, and Oliver ‘Ollie’ Rosberg. The company took advantage of a new and relatively unexplored field of excess inventory sales. Over the near four-decade stay in the commercial scene, the company has grown immensely, evident by the 356 stores the company owns at the moment. It also deals with a variety of items such as household items, sporting goods, building materials, and many more. Dealing in a variety makes it a versatile partner to many clients all over the country.

The last two decades have been game-changing for the company. Some of the milestones during this period include a change in leadership with Mark Butler taking the reins of the company. It also established a state of the art distribution center in York, Pennsylvania. To serve the southern states, the company brought up another distribution center in Atlanta, Georgia. In mid-2015, Ollie’s had its assets listed on NASDAQ and operates under the ‘OLLI’ symbol. Recently, it unveiled another one of these centers in Lancaster, Texas, to serve its clients in Western states. It continues to grow and presently boasts of a presence in 25 states in the US.

Trading In Ollie’s Bargain Stocks

As earlier hinted, if you want to venture into the stock markets, Ollie’s shares are stocks to consider. Let us look at some factors that may boost or act against your long term investment plans using this company’s shares.

1. The Company’s Longevity

When conducting a fundamental analysis of the company, one aspect to look at is longevity. Longevity translates to well-performing securities, and it also has a good reputation among investors. At the moment, it is hitting the 38-year mark, which is a sign of prosperity in the business world. With such a favorable reputation, many investors will want to buy into its market. This translates to improved performance of the company as well as a wider market-base, should you wish to dispose of some of your Ollie’s stocks.

2. The Performance of It’s Shares

Technical analysis requires you to look at the performance of the company’s securities before making an investment decision. According to the investor’s page on Ollie’s Bargain’s site, Ollie’s stocks currently trade at $44.95 a unit. This is a significant depreciation from its value around December, which was at $68.66 a unit. The dip is explainable as many companies have registered a poor performance from February to March 2020. It is a moment of economic recession, with the primary cause being the COVID-19 pandemic. However, its stocks generally perform well with a hint of stability. The present value is an appreciation from its worst days in the market in mid-March when its shares traded for $38.06.Stability is an essential factor when investing and guarantees the safety of your investments.

3. Projected Direction After The Recession

Ollie’s deals in excess inventory and products that are past their shelf life as newer editions grace the market. During this time, the quarantine will lead to a lot of items going past their shelf life; hence, Ollie’s inventory will be massive. Its products are quite affordable, and this gives it a vast and loyal client base.

After the pandemic is under control, Ollie’s will witness a spike in orders as many may capitalize on its cheap products. As an investor, this is good news as it means there will be improved profitability resulting in the appreciation of the company’s value. If the company takes such a direction, it is a worthy front for your long-term investment plan.

4. Competition Factor

Also, look at the competition factor to see how it will fare on in the commercial scene. The company has a unique business model, which is a contributing factor to its longevity. There are no potential competitors that may affect its performance in the retail industry. Its popularity is also a factor that will contribute to its excellent performance. According to CNBC, the company’s stores remain open amidst the viral outbreak. As such, it is still registering sales, and it will have a proper foundation once the slump recedes.

How To Trade In Ollie’s Shares

For a sturdy, long term investment plan, you need to have a proper trading approach when it comes to Ollie’s Bargain’s stocks. An appropriate strategy would be to buy Ollie’s securities in bulk right now when they are at a lower price. Later on, when the economic situation gets better, you can sell the acquired stock at an impressive profit. Short selling is another way to go, though you need to be knowledgeable on this trading strategy.

Final Thoughts

Ollie’s Bargains is an American company that deals in excess inventory and products that are past their shelf life. It has a massive catalog of products from sporting goods to furniture and other household items. It is a suitable company for a long term investment plan when you look at how stable and well-performing its shares are at the stock market. Highlighted are some of this company’s elements to look at if you want to invest in it. Conduct proper analysis before buying into the market for an assured long term trading stint.

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