This column is for investors willing to take more risk and potentially receive more reward.  The stocks mentioned in this column are not recommended to buy or sell.  They're brought to your attention so you can investigate them further to determine if they fit your risk profile.  Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings.  And some will have tremendous stories.

May 27, 2010 - Overstock.com Inc. (OSTK-NASDAQ) operates as an online retailer offering closeout and discount brand and non-brand name merchandise in the United States. It offers bed-and-bath goods, home decor, kitchenware, watches, jewelry, electronics and computers, sporting goods, apparel, and designer accessories, as well as furniture, home and garden products, shoes, and media products. The company also sells books, magazines, CDs, DVDs, and video games.

The company was formerly known as D2Discounts Direct and changed its name to Overstock.com, Inc. in October 1999. Overstock.com, Inc. was founded in 1997 and is headquartered in Salt Lake City, Utah.

Overstock got off to a rough start, didn't make money for the first 11 years. In 2006, the losses were $4.67 a share. In 2007, they narrowed to negative $1.73. By 2008, they were minus 55 cents. In 2009, things were positive, earnings came in at 33 cents a share. This year, 2 analysts have a consensus estimate of 75 cents a share (the range: 47 cents to $1.03). Next year, the consensus is for $1.02 (the range: 82 cents to $1.37). Here's a company that's doing well, in spite of the economic slowdown.

Revenues increased every year since 2007, starting with $760.2 million, then $834 million. Last year, they hit $876.8 million. Three analysts predict this year's sales will be $1.13 billion, then $1.27 billion next year.

Turnover of inventory, always a more efficient way to run a business, is increasing as management decreased inventory. That moves what's on the shelves faster. Management has also focused on accounts receivable, and those have declined. With cash coming in quicker and goods moving out faster, profits increase.

One thing to note about this stock is its price history. It started trading in 2002 and that year went from a high of $16.70 to a low of $4.40. From that point it headed straight up, reaching an all-time high of $77.20 in 2004. Once there, the stock slowly headed south, hitting $13.40 in late 2006. Then it took off again, and in 2007 got to $39.40 before crashing to $14.00 by late in the year. In early 2008, it bottomed around $9, then rebounded to $29.60, only to crack again in late 2008 to $6.30. In 2009, it started up again, reaching $18. In early 2010, it broke back to $10.90 before bouncing once more. So prepared for volatility if this stock is of interest.

More numbers: Trailing P/E is 35.17 while Forward P/E is 22.86. Price to sales ratio is .56. Price to book is 35.35. Book value is 66 cents. Operating margin for the last 12 months was 1.03%. Profit margin was 1.61%. Return on equity is forecast at 42.5% this year. Return on assets for the last 12 months was 3.89. Total cash is $106.2 million or $4.63 a share. Current ratio is 1.48. Total debt is $60.81 million. There are 22.96 million shares outstanding with a Float of 19.15 million. Insiders own 34.98% of the stock. Institutions have 63.60% of the float. There is no dividend.

Aggressive investors look for stocks with high volatility. This one fits the bill. Over the last 8 years, the roller coaster ride investors took on OSTK isn't for most. But some will not be put off by dramatic price moves. They'll find more time with OSTK to be of value.

- Company Web site: www.overstock.com

- Ted Allrich