lucky lenny

What Do the Schizophrenic Markets Want?

Roger,

I don’t think the pro’s on Wall Stret have fully factored in the impact of Circuit City’s bankruptcy on BestBuy. Per Circ City’s 10-k for fiscal yr ended 2/29/08, Circ City did $11.7 bill in sales for the year; had 693 stores in the U.S; 779 non-american stores, mostly in Canada, and the stock, CC - traded in the low 30’s in 2007; & paid a $.16/sh dividend in ’08. Given that BestBuy does about $45.0 bill in sales in yr ended 2/28/09; and competed on most products & delivery channels, I have to believe BestBuy will be able to ease up a bit on advertisng, expansion, remodeling, etc... And at the same time not have to be as aggressive on pricing. Granted, once PC Richard & others take over Circ City’s old stores, the environment will change. That won’t be for a few years. In the meantime, I think BestBuy has some breating room to really increase profits and profit margins. Stock currently under $39/share & projecting earnings of $2.70 to $3.00 in the year ending 2/28/10.


On Sep 23 07:01 AM Roger Knights wrote:

> Circuit City's bankruptcy has given BB a boost.

What Do the Schizophrenic Markets Want?

Michael,

Of the recommended stocks on this post, BestBuy does look the most attractive. BestBuy has upped earnings guidance to $2.70 to $3.00/share. On a personal level, I think places such as BestBuy & the former Circuit City are excellent; compared to Walmart. At BestBuy, they have tons of turnover, so they can always offer the most current models at the same or lower prices than Walmart. On a mixed note, I can never understand why BestBuy has so many sales reps hanging out on the floor. In summary, with the stock price under $39; and former Circuit City’s customers such as myself taking our business to BestBuy, I do think BestBuy looks very attractive. And your take on BestBuy is what?


On Sep 23 06:44 AM Michael Clark wrote:

> I'm taking it you own BestBuy.

What Do the Schizophrenic Markets Want?

Obama’s deficit spending is great for companies such as BestBuy which is consistently making profits. Although $2 trillion of debt in one year is insane. As I don’t want the US$ going the way of the Argentine Peso and Turkish Lira. Having said that, I think companies such as BestBuy, which is profitable and receives spending by consumers, w/ benefit tremendously. All that money flooding into the stock & bond markets; combined with all of BestBuy’s selling advantages, i don’t think BestBuy could ask for a better scenario.