The Joke about Best Buy
As you know, since releasing their earnings last week, practically every analyst and their mother has been blowing hard what a great quarter BestBuy just completed. Management bragged how they sold down so much inventory and even ran out of inventory in a few catagories.
The whole world seems to be cheering the outgoing CEO.....Hmmmmmmmmmmmmm.
If BestBuy had such a great quarter, and they did such a good job liquidating inventory......why did BestBuy end the quarter with about $1 Billion LESS cash and more debt and more stores to cover???
From this perspective BestBuy is running dangerously low on cash as it enters the slowest selling months of the year. You woulda thunk if they liquidated so much inventory for the holidays, they would be sitting on a pile of cash right now.......
No so........and the economy continues to slow.
Anyone think BestBuy really needs to raise some cash fairly soon to support their expanding operations, heavier debt load, and declining same store sales????????????????
Alstry does.........that is why BestBuy is Alstry's favorite Red Thumb.
As far as homebuilders go.........my suggestion is to stay as far away as possible......as home prices continue to decline....pretty soon every home that goes vertical will be a negative cash flow proposition for even the financially strongest HBs.
You can be like Donnerrv, or you can prepare........the choice is yours.