With Best Buy's bond ratings being lowered recently, this will have a short term impact on their ability to borrow, increasing borrowing costs during the holiday season and perhaps beyond. Even though Circuit City has filed for banruptcy protection, Best Buy will have a very tough time with holiday sales this season. The consumer is out of money and has not easy access to cheap credit anymore. These factors cause me to have a bearish outlook on Best Buy for the next several quarters. They will most likely survive, but it won't be pretty from a stock perspective.
I am recommending the sell of the retailing sector. Why? The reason is simple, no one is buying anything right now. When was the last time you heard of a friend, neighbor, or colleague bought a new car? I tell you that it is obvious all over America (if not the world) put discretionary spending on perma hold a couple of weeks ago. You can rest assured that there isn't a retailer in America (even Walmart) that will have a great quarter.
Ever since Bush went on prime time consequences..... the retail market has come to a screeching halt that is only slightly less frozen than the cr
As many of you guys aware, BestBuy is the dominating player among retailers (Circuity City, Frys, and Richard & Sons). I believe that it was able to support its market share from two major value drivers which are very obvious - quality control and customer service.
Quality control - In this segment, the company is evaluated by i) quality of product, ii) delivery time of product. Since BestBuy doesn't make a product in-house, the delivery time is evaluted when there is any 'returned item', i.e. how long does it take to provide a replacement for the customer who are having an issue.
TheStreet.com's Jim Cramer says that as consumers try to stretch their dining dollar, Darden, Yum! and McDonald's will benefit.
We all know we are overstored in this country and over-restauranted. There are tons of players -- so many that the competition got too hard. Now they collapse. That Uno might miss a payment, that Bennigan's and S...
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 ...
Good time for a rebound for this stock. I usually use the 7, 10, and 20 simple moving averages for 2 week swing trades. The price has crossed above all three now for 4 trading days. RSI is mid-range. This stock should bounce off the M/A for 10 - 20 trading days. I'm expecting a small movement up to 43.00 / share. I'm taking a position of 500 shares.
4/14 - "At $6, this (deal) values CC at an EV/sales of 0.06x on just reported FY08 results. This compares to the hardline average of 0.57x...CC did not generate positive
EPS of EBITDA in FY08, and we do not have it turning positive in at least the next two years, so traditional valuation metrics are difficult."
"With Blockbuster having 7x as many stores as CC, we believe this implies that 90% of CC stores have 7 blockbusters within 5 miles. Why then would a consumer pass by one of these options to go to a Circuit City store?...Similarly, we do not believe that customers shopping at a Block...
I own Circuit City in real life and it was one of my picks here.
I would love to sell my CC shares to Block Buster for $6.50. Take the hit and move on. Yet the stock won't hit $6.50 and it's falling fast up only 33% today for it's premarlet high of over 50%. I suppose it's a good day for me. But still I find it disturbing.
I knew I screwed up on CC when they had their earnings announcement and admiting to taking a hit on their Investment Vehicles which included leveraged mortgage papers.
Today Wachovia Bank is going down. Apparently they swept some problems under the carpet
TheStreet.com's Jim Cramer says the downside for these stocks is smaller, but they won't be his first line of defense.
You should not get oil ramping and retail ramping. You can't have early-cycle running and commodities running, even though I know that commodities are a "rest of world" story.
I believe that Wal-Mart (NYSE: WMT) (Cramer's Take) can run, but the others? I have to say that if oil isn't going down, these sto...
4/2 - "Best Buy provided what we view as somewhat rosy, although doable expectations for 2008...There seems to be this consensus that the TV market will be Best Buy’s undoing in 2008, but two thoughts on that. First, consumer electronics already has negative comps as the company works it way out of tubes and other dinosaur-related products. Second, this company is much more than TV’s. It is about market share gains in all markets, it is over 50% of future growth coming from outside the U.S, it is growth in Best Buy mobile and other new concepts, it is growth in video games and notebooks an...
4/2 - "The quarter was largely in line with the company’s most recent guidance, so in our view, the real surprise was in the guidance. Best Buy expects fiscal 2009 EPS in the range of $3.25 to $3.40, which captures the consensus view at the midpoint (+7%). Although this appears to be good news at first glance, we are concerned that expectations of a sales recovery and a gross margin improvement will prove too optimistic in the current environment."
"Domestic comps (same-store sales) decelerated by 450 basis points to -0.9% and international comps slowed by 590 basis points to 3.4% sequenti...
4/2 - "Technically, the stock currently has a negative technical profile. Intermediate trend is down. The stock trades below its 50 and 200 day moving average. Strength relative to the S&P 500 Index is negative. However, the stock is showing early technical signs of bottoming. Short term momentum indicators (MACD, RSI, Stochastics) are recovering from oversold levels. Strength this morning likely will push the stock above its 50 day moving average."
4/2 - "Best Buy showed optimism over its further earnings and forecast 2009 earnings above analysts' predictions. The retailer expects earnings in a range of $3.25 and $3.40 per share. Analysts, on average, predicted a profit of $3.31 per share.
With its positive earnings numbers, Best Buy is easily moving away from rival Circuit City Stores Inc. (NYSE: CC), proving its ability to dominate the consumer electronics market in the U.S. After facing some difficult time during the first months of this year, I expect to see a nice rebound for the company's shares in the coming months."
Looking for the bottom?....Keep looking.
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SELL THIS RALLY
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About Best Buy Co Inc
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