I don't currently own any BBY, but am very seriously considering buying in soon. I've watched BBY for several years and it is what I would call a cyclical stock; it rises precipitously from late September until somewhere during the Christmas buying season only to fall off afterwards. Last year I made a note to keep a particular eye on it in late September when it was trading around 45 and by Early December it had jumped to over 51. This year is of particular interest to me as a local BBY store here in the Atlanta Area (like most I would presume) is loaded up with new flatscreen televisions. While I know that the conversion from analog to digital isn't really going to effect most people ( who uses rabbit ears anymore?), still it is going to be a great "excuse" to buy a new television before February 2009, and when better to buy it than during the 2008 Christmas shopping season. Certainly the declining economy and the upcoming election are major variables, but I suspect that the irrationality of the US consumer as well as that pent up demand for newer televisions is going to burst through this Christmas shopping season. If I'm right, this could definately be a year one would hate to miss that "usual" ride up from late September to early December. Thoughts and Comments are welcome. Dales53
The big rush to new TVS will come in 5 to 10 years when OLED sets are perfected and reach mass market. They are thinner, lighter, and more energy efficient than either LCD or plasma.
This switch to digital broadcasting in 2009 is yet another example of a government fiasco with their ludicrous $40 coupon program. These silly coupons were SUPPOSED to supply poor people with free access to the new digital signals. Instead, once retailers found out the coupons were being issued they jacked up the prices on all DTV boxes so NONE retail for less than $20 above coupon value. Furthermore, the coupons are set to expire a few MONTHS after being issued, and the converter boxes with the best features will not be available AT ALL untill after the coupons expire.
Lastly, consumer electronics is a notoriously low margin game, and only morons with low credit scores buy any large ticket items at retail where they have to pay sales tax. Smart, creditworthy folks may shop in store, but they BUY ONLINE, and not from BEST BUY or anyone else who charges tax.
BEST BUY sales may look good on the surface, but as increasing percentages of their deadbeat consumer receivables become writeoffs, the stock will suffer big time.
It simply makes no sense to sell merchandise from a storefront with its large fixed costs (rent, utilities, staff, insurance, security, etc) when your competitors are selling the same items online for lower prices with a fraction of your overhead and still seeing larger margins.
Yeah right - GO LONG AND PROSPER!
If you are looking for an entry point, then anything under $44 is good for BBY. I would not buy in at a penny over. Wait until after the announcement tomorrow and see where it heads, and you will be rewarded. Best Buy is the segment leader, and will recover any losses in a very short time, relatively speaking.
The difference for BBY is not the amount of storefronts, but the amount of service they are able to provide. Ultimately, it becomes more profitable for them to sell and provide services through many locations. Add to that the fact that they are growing globally, and you begin to understand why this company is still a good growth vehicle.
Smart play today in picking up Napster, IMO.
Wow. Good Luck. This stock will be in the low 30s after December.Do you really think consumers are going out to buy new flatscreen TVs? I was in BBY on Friday and I could hear a pin drop.Retails are all shorts at this point.
More than likly all those flat screens will only be sold using a three year no interist loan. Not a big money maker it is just good for reducing inventory.
People might be generious during Christmas but this is the first Christmas that people are really getting the idea of where the economy is really at last year there were still rose colored glasses being sold everywhere.
If you are really serious about buying take care and take profits where you can.
Personally I went short at 44.00.