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Groupon Is A Buy At These Levels

Summary

The market has proved me wrong about Groupon in the past.

However, I still don't understand why so many analysts are so bearish.

I rate the stock a buy, based on its current valuation, and also because of the possibilities the company's food delivery service offers.

I have been trying to figure out the love-hate relationship between Groupon (NASDAQ:GRPN) and the market for a long time, but I still don't get it.

Yes, I mean the fact that growth is at a standstill for several quarters now is an issue. Also the fact that several of GRPN's global ventures did not play out as intended. However, is this a reason to mark down the stock so much? I think not, and this is where the opportunity lies.

A stop-loss means you made a mistake, not the end of the world

When you buy a stock and it does not work out, you sell. That's called a stop-loss, folks. When you enter a market or business and it does not work out for you, then it's better to exit at a loss than to continue. If you make a profit on it at the same time (like GRPN did), all the better.

Everyone is complaining about the fact that Groupon exited Ticket Monster. I am not management to know exactly what happened, but if they decided to sell for whatever reason, then it's probably a good enough reason. As for reducing the headcount 1,100 jobs, sure, it's not a good sign, but it's better than not doing it if you need to do it.

Groupon also exited Turkey and Greece and divested out of India. In my mind at least, they know when to leave before losses mount even higher. And that is a sign of vigilant management.

So while everyone is saying that Groupon's business model has not worked...


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