BestBuy’s critics are beginning to sound a bit shrill. Really... the predictions of BBY’s demise are premature at best. BBY is having its issues. However, the facts show BBY trades at a super-low p/e... being dumped on by everyone.... pays a nice dividend... makes about $1.5 billion a year or $3.50/eps diluted... aggressively buying back shares.... etc... as long as BestBuy’s Board of Directors stays the course of emphasizing profitable lines; reducing floor space; discontinuing the poorly performing overseas operations; paying a dividend; staying profitable; and continuing to buy back shares... I think BBY easily gets back to $35+ in 12-24 months.
I agree that BBY has a very strong balance sheet and has the capacity to successfully execute a turnaround.
Is the dividend large enough to buy and hold, while waiting for a catalyst to emerge?
If you are very patient, perhaps you will be rewarded in BBY, but many other stocks are also cheap and could turn around much sooner.
One that comes to mind is HAL. A Republican victory in the Fall, and the anticipation of a more rational energy policy in this Country could spur HAL much higher over the next year. CMI could also benefit from an enlightened energy policy, but it is still not cheap, despite the recent correction.
Disclosure: I own a small position in HAL and a larger position in CMI.