I'm close to two of the new stores that was opened in the last 18 months or so. I've never seen more customers in the stores than sales reps. Am I missing something? It just looks like this one will someday just run off a cliff.
I have a very small amount of knowledge in the general market but not in retailing. I believe I initially said in one of my blogs that I had not yet investigated the stock. Nor am I knowledgeable enough to buy options. So take your assumption that I was "knowledgeable in the business" and learn from it and realize that not everyone who sounds knowledgeable on the Web is.
Again I have no position nor options on HGG. I have not watched the stock long enough to make a decision one way or the other. One thing I have learned; is that if you want to make money in the market you do not have to hurry the purchase of a good stock. It will be a good stock for several months if it truly is a good stock and you can buy it any time during its run and still make money. Its the greedy Gordon Gekko-types that think you have to buy at the lowest point and sell at the highest point in order to make money. That is far from the truth. I am living proof.
I am a very caucious investor. Most of my monies are in mutual funds. I just to not have the time to do proper research. So mostly this is just play money.
I hear what you are saying.. you seem to be knowledgeable in the business. I don't think it matters if the sales are flat or slightly rising. There is no way these guys can be covering their overhead. I've talked to several people here in Birmingham. There is never .. I mean never.. any customers in the stores.
I'm debating purchasing a long term put option. I don't have enough experience to time the crash.
The secondary offering is touted to be used for growth, i.e., put up more stores whether leased or brick and mortar. BBY doesn't have a whole lot of areas to expand to, whereas HHG has the West and most of the western part of the Mid-West. The market pays for growth. BBY has to depend upon organic growth however HGG will use geographic expansion as their growth. They just need to be sucessful enough to keep the same store sales up and their new growth from year to year will carry them.
I understand your point. BBY has expanded into every area of the US. I'm also very aware that growth is king when it comes to share price..
Problem is.. I seriously doubt that these stores are making the sales to pay rent, utility bills and salaries of the personnel. They have a bunch of cash (at least for now ) It's going to be a cut throat Christmas season this year.
I'm a buy and hold investor. Warren Buffet style.
If I was a wheeler dealer.. I'd be shorting this one.
The one saving factor for this stock is the demise of Circuit City. If HGG does make it.. it's only because of Circuit City crashing.