Blue Nile, Inc. (NASDAQ:NILE)

owner ceo

While NILE at a 30X P/E is certainly not cheap it's trading at about 1/3 of where it was a few of years ago when the economy was strong and almost where it was at the depths of the recession when all looked hopeless. I liked the business but not the stock when the ecnomomy and their customers were doing well. I still like the business and see now as the right opportunity for the stock. It looks like their business has mostly gone sideways over the last few years however given the headwinds they faced I take that as a sign of strength. High end retailers have done well in the recovery so far but customers who are cost conscience not so well. I see NILE's business picking up once the economy is on a more robust recovery path and people who have to think about whether they can afford a wedding right now and how much they want to pay for a ring can relax. Since CAPS points depend on outperforming the S&P and even after the recent correction the S&P has held up fairly well lately I think now is a good time to add NILE to my CAPS portfolio.

short squeeze ahoy

The New Year will bring changes -- and corrections to highly overpriced stocks like RL, TIF, and Nile. Those foolish enough to hold these stocks are in for some pain.

Original pitch from "11 O'Clock Stock" series.

http://www.fool.com/investing/high-growth/2010/10/04/todays-buy-opportunity-blue-nile.aspx

To see more about the series, watch this video from co-founder Tom Gardner:

http://www.fool.com/investing/general/2010/07/22/introducing-11-oclock-stock.aspx

Buy what you know and love, right? I must say I was a bit cautious about buying an engagement ring via the internet, but my wife and I are both very pleased. Extremely easy to use and highly customizable, the website model is flawless. Luckily the price has dropped to the levels when I purchased the ring, giving me a second chance at this gem.

Short interest: 37% of float

The Blue Nile is a longshot that could rock the clock.

I have liked this company for a while and love what their doing with the new app. They are not cheap but are growing and as the economy turns around ( and it will) this is a great place to make some money.

Nile just missed earnings - 0.19 EPS diluted, versus 0.23 expected; and the price took a 5% haircut on the news.

Last year - 2Q 09 - was a miserable time for the broad economy, where NILE also made 0.19 EPS diluted. Y-o-y NILE made 0.34 in the preceding 12 months, and 0.32 in the months before.

The real story here is international sales. NILE's website is best in class - we know this - and it's starting to catch on overseas. International sales made up about 15% of last quarter's revenue, and international sales are growing at a 28% annual rate (21% if you adjust for currency, but why would you?)

I really like that number, I like the way they're aggressively going after global share, and I think they'll continue to execute. So I'm going back to this well.

A quality company and offer that simply seems to have too much downside pressure. Looking at the last few years of earnings, their own revenue forecasts through 2011 look flat (makes sense), but their P/E and Price to Book are both high; I would argue 3X.

Sales might improve, but with no yield why such a premium on an established online retailer with no breakout story?

Foolish pick - 5/2010

Blue Nile is trading at around 50 times 7-year trailing earnings and has a book value of a few bucks a share. Where is the value coming from? Does the company have precious metal reserves on the books at less than market value? Does anyone know?

growing....high p/e.

L/T play

My estimated P/E for this total year is 75. This stock has made a great run up this year, but for what reason? Earnings are down year over year, as is revenue. I'm a seller of this stock even if it beats on EPS, the P/E is way too high.

People get married even in uncertain times and Blue Nile has a great cost and experience proposition for men looking to make that once in a lifetime investment.

Cyclical action in an uncertain market in an adverse environment.

There is less momentum, less volume, and less buying going on. We are in the last part of this rally.

The 1929-1930 equity rally (coming out of The Great Depression) lasted 147 days and the market was up 46%. It has been the same amount of time since the March, 2009 low and we are up about the same percentage. It’s déjà vu (paramnesia), so prepare for a drop of about the same percentage (85%).