Luby's

LUB

Company. Luby's is a chain of cafeteria-style restaurants, headquartered in Houston, Texas, that uses the tagline "Luby's: Tastes like Texas. Feels like home." (company website)

Mostly, all Luby's has given me is a stomach ache.

Buy. When I bought Luby's stock in mid-June, it was on a tear. There had been several days price rises on higher-than-average volume. The trend was strengthening (ADX line).

In the meantime. For a time — OK, for a few days — it looked like Luby's was a winner. The stock pulled back a bit then climbed to a new high of $7. If only....

But I didn't. For the past three months Luby's has been vascillating between $6 and $6.75. Worse yet, the daily volumes shrank to almost nothing. My 1000 shares would have flooded the market if I had tried to sell them. I held on, hoping I could get out without too much damage.

Sell. Quite some time ago I put in an order to sell if the price dropped below $6.20. Last Friday, when it looked like LUB might actually start climbing again, I put in a trailing stop to sell if the price went down more than 20¢.

This morning, LUB jumped up to $6.68, which moved my stop up to $6.48. But then the market for LUB got all wobbly in the knees and the price fell enough to trigger my stop-order. Since a trailing-stop is a market order, my shares went to the highest bidder at the time, and there was a substantial spread between last price and current bid.

Since the trade executed, LUB has drifted as low as $6.31, so I don't feel bad about this small loss. With volumes having shrunk to a few thousand shares a day, LUB was a definite liability. It would have been nice if I had just sold outright this morning — I could have made a small profit — but at least using automatic trades took the emotion out of it. I'm glad to be rid of it.