Best Buy Co., Inc. (NYSE:BBY)

Length of holdings

stable

Market is trading with unrealistic optimism about consumer recovery. Had a poor reaction to earnings last month, and chart is weakening.

If the innovators at BBY have their way (and not just their say), customer service will become king, just as it is at places like Nordstrom. Since the death of Circuit City, BBY has not cleaned up as it should have. WMT and Amazon seem to be taking more market share from the Circuit City vacuum. Providing excellent and knowledgeable customer service would put BBY head and shoulders above the competitors. But it would take a concerted effort at training and changing the culture at stores.

Going to blow away first quarter numbers and economy is getting better.

I just don't think this type of brick and mortar computer store will have much of a future. Online on tigerdirect or newegg you can buy much better hardware at much better prices. Microcenter doesn't have very many locations but in general has more savvy employees and hence they give better advice. The geek squad stuff is not a good thing either since it tends to be sales people pushing overpriced support that you probably don't need. The more people know about computers the less they will shop at best buy.

No competition. Backlog of people who are holding off on new computer equipment, luxuries of music/videos, televisions, and home appliances.

Slow growth market leader at reasonable price.

I may be a little late on this one but I have just read some interesting stuff regarding Napster, which is owned by BBY, you may know it already so I will spare the details. At the very least they are going to put enormous pressure on AAPL which I happen to hate anyway, they are going to take away the ability for them to steal money from people for retarded amounts of money at itunes. They may also put some pressure on MSFT but I don't think they will, fact is the Zune is a loser to MSFT anyway, so if it stays a loser than its still a loser, get my drift. AAPL is much more dependent on itunes store than MSFT is. BYE BYE AAPL

GOOD CO

Circuit city is bankrupt and radio shack has been on a long decline. This company has a good historic track record. They have they best deals I can find if you want to physically walk in and shop for a laptop, and stores tend to be busier than their competition officemax/office depot. Sure, there's snooty people like kristm with their fancy-pants little check books with the puppy dogs on them -- and high rated jstegma who says "Sooner or later people are going to get tired of gadgets", but this place will do well as the McDonalds of electronics (not to mention DVDs, CDs, and Video Games).
This is only a 2-star stock, but so were PNRA, AMZN and MFE -- all did well for me. So we'll see what happens.

Once things have recovered and people are confident and have "spare cash" again many will return to the old ways of debt spending. We are an electronic society and many of us love our toys! I am guilty on that one as well.

Short, Short, Short.

BBY is not worth 40 plain and simple. Current P/E is 17 (high for a bear market environment). 40 is what BBY was pricing in 2007 when they were earning record profits.

Earnings have contracted...what's the justification for the price being the same? Yes, CC has lost business, that benefits BBY, but a receeding tide sinks all boats...some more quickly than others.

Just for example...BBY earned less last FY than in FY 2007 (2 year ago earnings...).

The retail game has changed. Brick and Mortar stores are becoming dinosaurs. Too much land/building risk (i.e. values decreasing and having to be written off books), Amazons model is the future.

And not only that, American consumers have permenantly changed. Just like the depression, Americans are rediscovering saving (rate now at 5% and headed higher). That means less discretioanry purchases are at the top of the list. BBY is huge on consumer financing which is contracting.

My main disagreement is the Price...it's doubled since it bottomed and that's just not sustainable in a volatile market. I thought BBY was fairly priced at 20-25 range. Consumers aren't buying more...there's no justification for the price, BBY has not produced a year-over-year increase in earnings for the last 3 quarters...by all signs earnings are not rebounding.

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.

Strong company and now dont really have any competition.

While Best Buy has a semi-monopoly for pure electronic stores, and it has benefited recently, these goods will take a hit over the summer. Good stock but no immediate upside.

a little overpriced since bankrupt of circuit city.

Overpriced and underused. I can live with my current canopener just fine.

There is only a few select places you can go to get what Best Buy sells. They take huge pride in the fact that they sell the latest products out on the market. You can go to Walmart and get a tv cheaper than you can at Best Buy in some instances but your buying tv's that are a year or 2 old. You go into Best Buy for the service and the knowledge there employees have, you can rely on them to help you solve your problems and find the right product for you. Its easy to go online or into a store and find something you like and thats cheap, but is it right for you? I pose this question besides the internet where can you go to truly learn about the newest products out on the market? Where do you go when you want to be lead to the right purchase you are looking for? There are very few companies that pride themselves in customer service anymore, and this is one of them. They will continue to have an edge on any other electronics retailer based on that simple fact CUSTOMER SERVICE!!!! OUTPERFORM ALL THE WAY!!!