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hhgregg, Inc. Message Board

  • r2kpgn r2kpgn Jul 11, 2011 9:31 AM Flag

    The Case for Retail

    Mr Miller just downgraded HGG. His astute analysis indicates that AMZN sells things cheaper than HGG. Wow that's earth shattering news. If you follow his reasoning all brock and mortar stores will close and AMZN will be the sole source of products for earth. I'm not buying a washer and dryer on AMZN. It's great for books and impulse items buy when it comes to high end products most people want to see it in person first. HGG will still meet AMZN prices if you ask.

    Now lots of people on this board comain that HGG is expanding, opening new stores etc; isn't this a great time to expand?? Leases are cheap, labor is cheap and they are using Zero debt to expand. The shares are dirt cheap relative to revenue growth. If revenue grows by only the amount of new stores (20%) and remains flat otherwise, margins remain flat at 2.3% (same as bby) although margins will increase somewhat without any other changes since all debt has been retired.... If the market values retail at a modest 18% P/E instead of the current 8.... in 5 years you are looking at a 60$ stock. All of the anylists will yell strong buy after the horse is out of the barn. This is an out of favor sector in a weak economy. Other than bank stocks, retail will lead the recovery. this is a well run company with a great balance sheet.

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