The Company is a retailer of video products, brand name appliances, audio products and accessories and currently operates stores in Ohio, Indiana, Georgia, Tennessee, Kentucky, North Carolina, South Carolina and Alabama.
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I didn't realize hhgregg, Inc was on one of the MF subscription lists as a "candidate" until it crashed and got moved to hold. I'm generally NOT a fan of retail outlets that specialize in appliances, mattresses, and TV's, but I've tried downthumbing some in the past (ie. conns) and gotten burnt. In the Midwest, where these are, there is less competition from big box and the local store such as these, (Western Auto was one I use to shop) get a bit of local loyalty and payday/income tax return shoppers. They appeared to be growing and I believe have a little immunity that may protect them from the way of the dodo bird, circuit city, best buy, etc.
At any rate, I was trying to "play the selloff" of 34% on July 10th for a bounce. hhgregg appeared to be a potential bounce candidate as volume is low, insider ownership is high, institutional holdings is ultra high, and the lowered guidance was still relatively positive overall. (At least in the short run). Sales still up by 3-6%, Earnings in 2013 of $.90 to $1.25, or stil a P/E of around 7.
hhgregg, inc is still expanding rapidly, hiring rapidly, and showing full signs that it can compete. I'm not falling for an increase in TV sells as some investors were looking for, (based on newer models). Again, rural areas may buy at department stores such as hhgregg, but I don't see any new technology those poor folks are going to pay for.
Overall, I think the downward guidance received an overly negative selloff, although if it's a warning of things to come things could get worse. I don't read it that way and I think hhgregg's locations and it's ability and willingness to expand could make the selloff a bargain with a P/S of a paltry 0.1 and below now trading at .72 book. $59 Million in cash and no debt.
Overall, this might be a serious sleeper and I'll have to monitor it. Even though I don't like this type of retailer, I do have plenty of relatives in that area and I understand the urban way of doing things.