IBP - Bad Stocks - Installed Building Products And SPS Commerce - Propped Up By A Good Economy
A rising tide lifts all boats. When the economy grows rapidly, as it has over the past year, even poorly-run companies can see a boost in their fundamentals.
These two previous Danger Zone picks both fell more than 30% before improving macro-economic conditions bailed them out and led to big increases in their stock prices. However, the fundamental flaws we originally identified remain in place, and these businesses will be extremely vulnerable when economic conditions worsen. SPS Commerce (SPSC) and Installed Building Products (IBP) are in the Danger Zone.