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  • Best Buy: Monthly Retail Sales Data Bode Well For Best Buy [View article]
    You're right.

    I was simply trying to make a point that there's an unusually large amount of new product launches this year that will benefit brick & mortar electronics retailers particularly given the new price match policies in effective. Whether its this quarter or the next, popular new products are a boon for retailers like Best Buy.

    It doesn't matter if a stock is up +1,000%, if it continues to beat consensus expectations on current EPS and forward growth and remains attractively valued relative to its peers...it'll continue to increase in price!

    Despite its YTD performance, BBY is not bound by valuation concerns as it trades at a very reasonable EBITDA multiple of 7.8x compared to Walmart at 8.4x, CONN at 20.0x, and AMZN at 51.8x.

    With respect to the taxes comment, I believe that 15 states already collect internet sales tax including the three most populous states, California, New York and Texas. So for the majority of Americans...no tax benefit from on-line shopping. Moreover, there's usually shipping fees incurred then waiting 3-4 days for delivery then there's the hassle of returning a product should there be a problem.
    Nov 18 05:26 PM | Likes Like |Link to Comment
  • Insiders Are Selling Best Buy [View article]
    Hey Ren,

    I have not considered it since I don't trade stocks. I like to invest in companies that I feel are mis-priced by Wall Street like BBY.

    The monthly retail sales report highlights growth on a month-over-month basis. For example, the August 2013 report showed an increase of 0.2%...from July 2013. However, from a year-over-year basis, the August 2013 report was 4.7% above August 2012. July 2013 was even stronger at a 5.2% annual increase. Under an annual reporting format like retail companies employ to compare their results, retail sales are actually quite strong!

    Sep 24 02:17 PM | Likes Like |Link to Comment
  • Insiders Are Selling Best Buy [View article]
    I would caution anyone to do their own research and due diligence before taking advise from any message board poster, myself included.

    Despite the rather aggressive conviction of a short seller that - amusingly - "shorted at $36.75" on Sept 9, BBY is NOT going to zero in 36 months.

    In addition to the effective cost cutting initiatives, here are additional catalysts that I believe will drive incremental earnings upside through 4Q2014:

    * the Samsung and Microsoft shops will be completely on-line for the upcoming Xmas season
    * new product launches occurring this fall including a number of iPhone models (that sold out over a weekend), gaming consoles, smart watches and TVs should drive significant top-line growth
    * despite the jump in interest rates, home sales continue to improve driving strong appliance sales
    * very easy y-o-y comps for both 3Q2014 and 4Q2014
    * their website should continue to perform very strongly highlighted by the ability to shop on-line and pick-up same day at a store
    * wild card: inevitable implementation of the Marketplace Fairness Act

    In my opinion, it is these catalysts and not just the cost cuts that are driving the warranted price target increases by a number of research firms.
    Sep 24 02:27 AM | Likes Like |Link to Comment
  • Best Buy: Is Price Matching Accelerating Amazon's Declining Growth Rates? [View article]
    Thanks Michael.

    I wasn't quite sure how to examine the impact of on-line sales tax collection on Amazon's electronics sales growth.

    Sure, there were only about eight states that required on-line sales tax collection through September 2012, but they include the three most populous states, New York (sales tax collection implemented April 2008), Texas (July 1, 2012) and California (September 15, 2012).

    Particularly, with respect to Texas and California that implemented on-line sales tax collection in 3Q2012, I have no doubt that it may have impacted AMZN's sales growth in 4Q2012 to some degree.

    However, what doesn't make sense to me is that there should have been a surge in AMZN's on-line sales by California residents during the first part of 3Q2012 (prior to the collection date of September 15, 2012) and by Texas residents in 2Q2012 (prior to their collection start date of July 1, 2012) attempting to avoid paying their state's sales tax on purchases made on-line, like the fellow featured here:

    http://cbsn.ws/16ePc71

    In the case of AMZN's electronics sales, I can accept the accelerated pace of sales growth decline of 51% in 4Q2012 from BBY's price matching (and on-line sales tax collection program, I'm sure), however, what I don't understand is that the expected surge in sales from residents of two of the country's most populated states to take advantage of the shift in tax policy did not appear to have a more favorable impact on AMZN's sales growth in either of the two preceding quarters:

    3Q2012 = -30% annual change in AMZN electronics sales
    2Q2012 = -39% annual change in AMZN electronics sales
    May 24 02:39 PM | Likes Like |Link to Comment
  • 'Worst Buy': A Revenue Problem [View article]
    Revenue expectations from analysts were $10.66B for 1Q2014.

    BBY's 1Q2014 revenues were reported at $9.38B.

    HOWEVER, since BBY had announced the impending sale of their European operations, they recorded the attributable earnings as discontinued operations thereby removing all impact of Europe from the statement of earnings into a single line item, discontinued operations.

    As Best Buy CEO Hubert Joly noted on the earnings call and even later on a segment on CNBC, including the operations from Europe (and adjusting for other restructuring costs), BBY's 1Q2014 revenue is $10.8B or 1.3% higher than consensus expectations of $10.66B.

    Both the author and the editors need to do a better job getting their facts in order before they publish some articles.
    May 21 02:18 PM | 3 Likes Like |Link to Comment
  • Best Buy: Be Careful Shorting A Cheap, Event-Driven Stock [View article]
    Margins, sales growth...etc. used to be much better that's why the stock was +$55 in 1H2006 and trading at over 12.5x EBITDA on 2007 numbers.

    The eroding operating metrics due to competition is reflected in the falling earnings from 2010 to 2012, as outlined, and it is why the stock currently trades at 4.0x EBITDA.

    My argument is that, relative to its peer group valuation and given management's prowess in effectuating a viable turnaround strategy that will enable it to compete more effectively with internet retailers, it should trade to a higher EBITDA multiple.

    I am no way saying that it will ever command a +12x EBITDA multiple but with stabilizing sales and growing earnings isn't one between 5-6x realistic?
    Apr 17 06:29 PM | 1 Like Like |Link to Comment
  • Best Buy's Upcoming Catalysts Warrant The Barrage Of Upgrades [View article]
    slick,

    The reality is that 4Q2013 numbers came in much better than expected. It's not my opinion nor is it hype.

    The fact that U.S. same store sales stabilized, that on-line sales rose double-digits and that free cash flow was enormous led to renewed interest in the stock. Coupled with, what appears to be, a capable management team outlining a reasonable turnaround strategy, BBY has been rewarded with the slew of upgrades that have led to a +30% increase in the price in March.

    Yes, in my opinion and that of the analysts that have upgraded the stock, I do think that Joly can execute the turnaround plan. It's not rocket science, its price-matching to recapture market share, its focusing on on-line sales to reinvigorate the multi-channel consumer experience, its closing unprofitable stores, opening more profitable mobile stores and re-merchandising to improve margins. And along the way, if he manages to sell his woeful international operations and get some help from the Marketplace Fairness Act, then...even better for the company and the stock.

    In the end, the only thing that matters is earnings growth. Not my opinion nor yours. If the turnaround strategy works then it will be reflected in BBY's earnings. And according to consensus estimates (analysts that know the company better than you or me):
    * FY2014 EPS $2.17, up 32% from FY 2013 actual
    * FY2015 EPS $2.34, up 8% from FY 2014 estimates
    Those are the facts and that's the REALITY.
    Mar 24 02:39 PM | Likes Like |Link to Comment
  • Best Buy's Upcoming Catalysts Warrant The Barrage Of Upgrades [View article]
    Could be. Or it could be a function of a number of data points over the past month or so that were well received. To begin with - and as mentioned - the implementation of permanent price-matching initiative designed to recapture market share was applauded. More importantly, it was the 4Q2013 earnings release that showed a stabilization in domestic sales, an 11% increase in on-line sales and better than expected free cash flow generation. Moreover, it revealed that holiday price-matching had only a minimal impact on margins given Unilateral Pricing Policies implemented by CE manufacturers. Finally, it broadly introduced a capable management team that outlined a feasible turnaround strategy. Perhaps these items may - in part - explain the reversal in opinion regarding BBY.
    Mar 22 03:09 PM | Likes Like |Link to Comment
  • Best Buy's Upcoming Catalysts Warrant The Barrage Of Upgrades [View article]
    Cutting costs is just one of the many components of the turnaround strategy outlined by Joly and his team that also includes price matching to eradicate "showrooming" and recapture market share, accelerating on-line growth to facilitate a broader multi-channel customer experience and rationalizing its footprint to improve store ROIC to include both store closures and merchandise promotion. For the complete overview of the plan, please refer to the 4Q2013 earnings transcript available at Seeking Alpha. Or if you're really curious, download the actual strategy presentation entitled "Renew Blue" that's available on their website.
    Mar 22 11:10 AM | Likes Like |Link to Comment
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