Best Buy Co., Inc. (BBY)

Best Buy is a solid company with a good balance sheet and I believe strong long term growth prospects. The stock is fairly volatile, and quite frankly, is close to fairly valued today, but management has proven quite capable of growing the company in the past, and I expect them to continue to do so in the future. The company has recently initiated another round of stock buybacks, which I think indicates management's belief that the stock is undervalued, in addition to raising the dividend. The yield is small (less than 1%), but I suspect that this will be the WalMart of electronics stores in a few more years.

Stores like Circuit City and RadioShack don't tend to do much in the way of customer service, at least in my experience... I like Best Buy's innovative customer-centric approach. It seems like right now, with price wars going on, investors are very down on Best Buy, but I think for the long term this company is fine (especially if it's taking market share).

After reading Rick Aristotle Munarriz's article here:
http://www.fool.com/investing/high-growth/2007/11/12/3-stocks-to-buy-in-2008.aspx
I have to agree with him: Best Buy stands to do well with the conversion of all TVs to digital format by Feb. 18th, 2009. Looking at the financial numbers on Yahoo! Finance, I like what I see now: PEG= 0.98; Trailing & Forward P/Es of 16.6 and 12.9, respectively; an EV/EBITDA of only 7.8 (a very good number, representing how much it would cost someone to buy the whole company for the EPS the company spins off; the lower, the better); profit & operating margins are thin (as expected for an electronics store) at 3.56% & 5.29%, while Return on Assets and Return on Equity are better at 10.20% and 30.74%, resp.; and an amazing 18.2% of the stock is owned by insiders. The downside risks are that Debt/Equity=58.5%, but that's also expected for a brick-n-mortar electronics store, I think.
The key to BBY's success will be inventory management and advertising. Circuit City's continued fall from grace leaves Best Buy in an enviable position as the leading "brand" for electronics stores. Couple that with the requirement that all analog TVs (without digital converters) will be obsolete by Spring 2009, customers will be flocking to the stores. Finally considering BBY is near is 1-year & 2-year low, I don't think we have a lot to fear with BBY falling much further.

Wow, I can't believe this stock is up today. Here's the problem with right now. Name one thing at Best Buy that you NEED?

Maybe you NEED an appliance, but thats about all they have that isn't a luxury item (I cant do dishes by hand, wash clothes in a basin, and hang them on a line to dry). Now factor in that Circuit City is closing and liquidating. If you have money and want to buy a flat panel where would you go? Liquidation prices or full retail prices?

So that's takes us through to the end of March (end of liquidation) I wouldn't be suprised if Best Buys sales drop by 40% over last year given the recession and the liquidation. Now we have 30-35k more people unemployed. Are they going to be buying from Best Buy or Wal-Mart? My guess is that more and more people will head to Wal-Mart or online rather than pay Best Buy's ridiculous prices in this economy. I say sell it all because it wont be worth much in 6 months. Look for a stroung rebound in the 4th quarter.

Best Buy is where I buy all of my electronic consumer goods. Its last 2 quarters have been great. It has a buy back share progam.
Time to get in to Best Buy before the holiday season comes.

The boost provided by Circuit City's demise is not as large as people anticipated. Also, the restructuring of senior sales associate's pay is hauntinglyfamiliar to what Circuit City did, which killed morale and the company. Best Buy needs to pay close attention to this and make changes immediately if they start going down the same path.

I tend to go to Best buy to look at what's available and check out their prices. Then I go online to check internet retailers that I have used in the past and have offered good prices and service. Usually I can find a better deal than at Best Buy plus no added tax and sometimes low cost shipping. With online reviews, such as Amazon and others, its frequently easier to sort between competing products. So even though Circuit City is gone, their real competition has not gone away.

Best tech retailer in the world. Changing the way tech retail is done. Just starting to grow outside the US, especially China. Market gyrations created great opportunities to pick up this stock several times a year.

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).

Long-term Best Buy will be a great investment, they are a clear leader with their services, and I simply think they have a lot of international opportunity, so look for them to keep up a nice growth rate over the next five or so years.

Best Buy has opened a retail store in Shanghai, China with Jiangsu Five Star Appliance Co (14th in China). At 80,000 sq ft it is BBY largest store and the first outside N. America.
Besides good sales, I think BBY will fill the service niche which is waiting to be filled.

Closing stores now.

With companies like Tweeter, Circuit City and Comp USA closing stores around me left right and center BBY keeps on chugging along. Circuit City never seems to have any good things to report either, once the market leader in consumer electronics, Best Buy now holds this mantle. This company seems to have the innovation that it’s competitors lack.

The removal of this competition is good, but the main threat seems to be coming from online stores with some threat from the big box stores such as Walmart. This is Best Buys biggest threat.

I've owned these shares in my regular portfolio for a few years without too much appreciation. It seem like it’s closer to the lower end of it's valuation range, so figured now would be a great time to add it to CAPS.

Technology is constantly changing, giving Best Buy lots of new products and repeat customers.

Paying a small dividend that it just started recently and is increasing. I

Just started opening stores in China.

Great balance sheet. 3.8B in cash 650M in debt according to Yahoo Finance. Can reward shareholders with stock buybacks and dividend with this money or use it to push into overseas markets.

CEO Brad Anderson has been with Best Buy for 30 years
Chairman of the Board, Dick Schulze owns about 15% of the stick. Nice high insider ownership.

With a market cap of 21B it is a bit larger than the companies I like to invest in. This one is going to be a steady grower over the long term. No huge growth spurts like some of the small cap companies. This is definitely a 5 year plus long term buy and hold.

Prepping for the christmas season.....

They seem to do particularily well through Christmas and are the place to go for consumer electronics purchases with everyone I know. The only other place I buy consumer electronics would be the applestore.

BBY is reasonably priced at $43 and I'm watching many of their smaller competitors getting sucked down the drain like Circuit City. Less competition, clean stores, negotiating power-what's not to love?

Strong support at 50.21 Close if it breaks.

Like always market is overreacting.

Profits rose 150mln vs $138 million yr ago

Quarterly revenue rose 15.5%

Best Buy shares are trading at 19.1x this year's projected earnings, compared to 22.5x for rival Circuit City Stores (CC)

sell best buy
buy radio shack

BBY is going to make a killing this Christmas with HDTV, PS3, XBOX 360, and HD DVD. HDTV's are really starting to hit the sweet spot and content is increasing every day. Watch for increased margins due to more Geek Squad business.