$43.54
0.41 (+0.95%)
Best Buy Co., Inc. (BBY)
CAPS Rating:
The Company is a specialty retailer of consumer electronics, home-office products, entertainment software, appliances and related services.
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The significant cash flow increase over the last 3 years puts BBY in a prime position to increase growth and revenue in the wake of the collapse of Circuit City. That's not to say that BBY couldn't suffer the same fate as Circuit City; there's still a hell of a lot of competition out there (Wal Mart, Amazon, etc).
EBIT is down, Net income is down, EPS is down...where do you get cash flow increase? COA (cash from operating activities) was negative Q1 and Q3 last year. What's more is they issued a total of 2.2 Billion in debt in Q2 and Q3 last year (bad time to issue new debt)Net Cash is 500 million, Accounts Recievable (which can't be counted as good as cash in this environment...more credit defaults, which is a lot of BBY business) 1.8 Billion...most is tied up in inventory which has to be worked off 4.7 billion. What's more is their current ratio is over 1. They have more current liabilities than current assets. What's even more is if we add up long term liabilities and correctly add the balance sheets. 1.062 Billion in "Other" Short term assets...i.e. probably not tangible, 2.203 Billion in "Goodwill" another traditionally not true asset (because whatever business they overpaid for...is not worth what they paid for it, especially now)173 million in "intagible assets" 689 million in "other long term assets" So really assets are 11.699 Billion, Liabilities (which interestingly are ALL REAL) are 11.183 Billion...consumer is going to be weak for at minimum for 2 years maybe more.
To Stromprophet,
Perhaps you mean the current ratio is under 1, not over 1.
The accounts receivable you mentioned arose principally from the company's purchase of Carphone Warehouse. When final valuations are completed, this asset will convert to cash, probably by the 2nd quarter of 2010. (Check the SEC filings for more details.)
The company is reallocating its sales floor to better mirror the desires of its customers. Look for less floor space dedicated to appliances, and more to connectivity solutions (Geek Squad in the center of a store with room vignettes surrounding it).
Over the years, BBY has proven that it can adapt, and adapt quickly, to changing market dynamics.
I don't expect it to disappoint now.