Best Buy
Best Buy ( BBY ) has posted strong returns on equity over the past decade. Its 10-year average return on equity (ROE) is 23.1%, and it hasn’t had an annual ROE less than 20% in any year in that period. That’s a sign of strong management and a durable competitive advantage over its competition. With a market cap of $18.1 billion it sells everything from refrigerators to DVD players to computers to office furniture. With consumers’ need for the latest technology not ending anytime soon, this company has great growth potential. In an effort to increase its annual sales to $80 billion over the next five years, it plans to open new stores, expand its product offerings, and expand the Pacific kitchen and bath centers across the US. This progressive company is planning a $2 billion joint venture with Britain’s Carphone Warehouse Group to expand its operations across Europe. A covered call investing position for Best Buy is currently available with a potential return of 3.4% (29 days) with 7.9% downside protection. Even if the price of Best Buy’s stock drops less than 7.9% at stock option expiration, the position will remain profitable
Analysts'
Recommendation: | Hold |
| 30 Days Ago: | Hold |
|
| Analysts' Target: | $51 |
| Analysts' Targets |
| Deutsche Bank Securities | $48 |
| Accumulate |
Wednesday, June 18, 2008
|
| RBC Capital Markets | $54 |
| Top Pick |
Friday, March 28, 2008
|
$40.1 (08/05/08)
