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alstry (35.44)

Is BestBuy a Buy?

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July 02, 2008 – Comments (2)

Consumers buying less coffee.  Fewer cars driven off the lot.  Not many homes are being snapped up.  Furniture stores are closing down.  HomeDepot and Lowes are seeing sales slowing month after month.  Restaurants are begging for customers.  Retailers having a hard time staying open due to slowing sales.

With jobs being cut by the thousands daily.  Gas over $4 per gallon and food following lock step......you think people are going to be rushing out buying big screen TVs?

BBY had negative CE sales this past quarter....how do you think next quarter is going to look>

Not only that, WalMart and Costco are doing a much better job selling consumer electronics anxious to drive revenues.

BestBuy just spent over $2 Billion buying into a European Joint Venture and over $3 Billion buying back its shares recently.  Now low on cash and very leveraged going into a consumer slowdown......how do you think BBY's prospects look?

2 Comments – Post Your Own

#1) On July 02, 2008 at 12:50 AM, TDRH (99.72) wrote:

Would not consider it a buy.   What we are experiencing is a shift in consumer demand from tighter lending standards.   The entire consumer portion of GDP is contracting.   Solid company, will not disappear, but it will take a couple of years to run its course.

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#2) On July 02, 2008 at 1:20 AM, MetAdam (40.09) wrote:

There may have been hope for this one since the economic stimulus checks were received by almost every one who is eligible, but too many of those people have started watching financial news and checking out financial websites.  Due to that, they are starting to get the idea to invest in stocks as opposed to expensive, uneeded electronics. 

On a personal note, I loathe this store.  I would take a Costco sale over Best Buy.  Not only that, but even Walmart is starting to sell semi decent electronics.  More competition at more competitive prices will slowly take a toll on Best Buy. 

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