Mike Kayes, CFA

My Best Buy Concern

Despite the difficult economy there are still a lot of consumers who have more money than time, so there is a need for some level of in-store expertise to help these people make purchase decisions. While opportunities do exist to find cheaper solutions on-line, the time and potential confusion related to doing on-line research into consumer electronics purchases makes the in-store Best Buy experience much more palatable in many instances. My sense is that customer satisfaction at Best Buy is relatively high.

Is Best Buy a Value Trap?

The key with regard to Best Buy, during this difficult retrenchment in consumer spending, is how are they doing relative to competition? BBY is gaining share, is investing significantly more than the competition, and this will drive future growth once consumer spending rebounds. The stock is a long-term buy!