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Best Buy Co., Inc. Message Board

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  • pkmiami4 pkmiami4 Mar 30, 2012 5:05 PM Flag

    Best Buy is my first stop

    Go ahead and waste your money. You can almost ALWAYS find the same stuff online for cheaper and often with free delivery. I sometimes go to Best Buy to check out gadgets, write down model numbers, while comparing prices on my phone. I only buy small things at Best Buy where the online saving are minimal. I'm sure the profit margins on such items are minimal. Bottom line: Best Buy doesn't make products, it only sells products. Due to its huge overhead, it will never be able to compete with online prices. They are doomed. Compare to Apple stores. Apple sells it's own merchandise. Prices are the same in store as online, so if you're gonna buy you might as well buy in the store. BBY will be below 15 dollars by the end of the year. If you like retail, there are 50 other companies with better prospects. Why throw away your money here?

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    • I agree, the business model no longer works, as an investor the best thing to do is sell and move to the sidelines, not negative just reality. Good luck to those who decide to ride it out or down as the events unfold.

    • <<< often with free delivery. >>>

      Delivery is never "free." Someone pays--either the customer or Amazon.

      Actually, delivery costs are a key advantage for Best Buy.

      Best Buy can take the order online, then ship the item to a store for pickup, along with a regularly scheduled delivery. This reduces delivery cost for online orders to near zero.

      Amazon, on the other hand, must ship each item separately. Very expensive and no way to get the cost down.

      For Amazon, delivery cost IS the huge overhead.

      I suspect THAT is why Amazon is considering opening stores to complement their online sales--just like Best Buy already does.

      <<< Compare to Apple stores. Apple sells it's own merchandise. >>>

      More Apple products are sold in Best Buy stores than are sold in Apple stores.

    • Revenues, gross profit and operating income (excluding unusual items) are flat in the past 3 years. They have $3.3B in cash flow in 2012 for a $8.4B market cap. They are buying back 10% of shares every year.

      If they are able to keep doing what they've been doing for the past 3 years they'll have over $4 EPS 2 years from now. They don't even have to grow. In fact their revenues and profits could go down a little and they'll still get to $4 EPS just by buying back stock. Best Buy better die soon or the shorts are going to get squeezed.

      I understand people shorting Radioshack or Sears. For Sears, sales are going down and their cash flow is NEGATIVE. Radioshack had a 45% fall in operating income.

      I don't know any other retail stock besides Gamestop that is as cheap as Best Buy.

 
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