I don't short, I buy puts so there is no need to cover... What I made on the holiday release is 10X what I lost today, and my puts still have about 4 weeks left on them.
That being said, 10 years from now BBY might be bankrupt or if they are lucky an internet company with a few locations. Sales are shrinking every year and profit is missing estimates.
Earnings was .88 vs 1.01 (which was already reduced from 1.62) but from "continuing businesses" (meaning businesses that they are not closing down) they made 1.24 EPS.
Rev was 14.47 vs 14.66 estimate (which was down from 14.92)
See you under 20 in a couple weeks, this is ridiculous.
Yes its going good because JCP beat estimates of a .84 LOSS (and only lost .64). When BBY reports their loss for the quarter I dont think the market will be as forgiving.
Good luck... you might be able to buy some under 20 tomm
The only thing that BBY is telling us going into the earnings is that whatever they are currently doing is not working.
Do you think that if they were hitting record numbers that they would be firing "2000 managers"?
This reminds me of when LULU came out 2 days before earnings and said that they had replaced the CEO... 2 questions I asked myself, A) why pre-release that info and not wait 2 more days B) That meant (in their opinion) the current CEO had dropped the ball. Obviously I went short before earnings and then there was a 20% drop from 70 to 60.
I think that best case scenario bby takes a 15% dive on tomms earnings to the level that is was 2-3 weeks ago. Worst case scenario, we see negative EPS, and the shares touch 17 a share.
Keep in mind that firing, closing and shrinking are not what investors look for.
I don't think there is any chance in the world for BBY to be green after earnings. But I do agree with you that gift cards can be a big factor.
The change in the weather will not effect Q4 numbers, might lead to some better guidance for how Q1 is going though.
The numbers have come down (I believe) 30% since the holiday release. I think that there will still be a decent miss. I wish I was able to draw you a chart on why I feel the way I do but I will give you the short hand.
Revenue was lower even with deep discounting
Discounting hurts EPS, not Revs
Therefore their "deep discounting" has effected Revs and EPS.
Conclusion; There is a chance that EPS turns negative on the Q4 earnings. Once the earnings turn negative, that can put last years low of 12 a share in play.
Whats your play going into the earnings on thursday?
I went super short into the holiday release (like we discussed), I am already getting my short positions ready for next week.
I think the earnings are going to miss much further than you/I would expect. This price matching is going to hurt margins. With bad weather and sales that were accelerated into the xmas season (because of additional discounting) I think jan sales (which are included in this earnings season) are going to be much worse than expected.
I can easily see another drop after earnings, this time below 20, and closer to the 14 dollar range they got a buyout offer last year.
GE market cap of 260 billion
PNRA market cap under 5 billion
Its like saying "why is my hundred dollar bill worth 100 dollars while GE is only worth 25 dollars." Cant buy the whole company for 25 dollars
Honestly, the metric for this stock do not make sense once the stock the stock starts showing declining same store sales and says things like there is increased COMPETITION. The word competition in a earnings release means auto sell.
A P/E of 25X 2014 earnings (which it twice as much as competitors) would mean 41 a share. I would not be dabbling in this stock at the current prices. If anything I would short through 45. But that is my opinion and I have been wrong before.
Look at the FWM chart for advice... all these (larger) supermarkets are getting in on the healthy game and it is going to hurt WFM bottom line.
If your crazy enough to SELL uncovered calls you are straight dumb.
I bought puts last month before best buys holiday release, how many times you think that guy made free money until the one time that he got ripped apart.
made about 10X on those puts over night... unfortunately I sold them too early
I see something very similar, but to me the chart looks like (if it breaks 50) we might see 45 by friday. I cant believe we have not seen more price movement yet....
FWM (fairway) followed similar movement after hours, when they released stock went down 15% after hour then when the stock opened it dropped a full 29%.
Actually that is the reason I looked at this stock.
WFM missed on all relative estimates.... Revenue, EPS and SSS (same store sales) all came in well short of estimates. The most concerning for this stock is that SSS is down. For a company that is selling over 37X EPS you expect growing sales.
There is a good chance this stock breaks 50 tomm, and if it does the next support looks to be around $45.
With that information now tell me what the average purchase was, what percentage of those sales were net profits, how those margins compare to last year, and how fast they are growing.
The problem is not people going into the physical locations (in places like BBY), the problem is they are being used as a showroom for amazon.
Now BBY is price matching competitor (including amazon) but there is one problem with that AMAZON IS A GROWTH STOCK AND DOES NOT TRADE OFF HOW PROFITABLE IT IS, Best Buy does.
Although I agree this guy is more than likely full of it, you need to keep one thing in mind.... rich people are cheap.
If they can buy the same item for a cheaper price at Wal-Mart, not only will they buy it but they can afford to also buy it in bulk.
It is poor people that have a tendency to be taken advantage of on prices because until recently they did not have computers to check prices and didn't have cars to drive to cheaper retailers.
Was short 10k shares and I had to sell over 30 a share... I want to get in touch with the SEC. Without the BS buyout offer the stock would be trading under 20. This one truly hurt.
I bet the stock still trades under 20 in the next couple weeks to come, I just wont be part of it.
If company goes BK, the puts are changed to the new symbol and are still in effect.
If the company is wiped out, you make bank.
Same thing as when a company does a split, your put becomes 2 puts...
You guys think AAN with meet, beat or miss their earnings estimates (that they set 2 weeks ago),
I tend to think that they will miss, but I don't know if I have the balls to bet against a company that have pre-released earnings 2 weeks earlier.
I owned 30,000 shares of LVS back in 2008.... but that does not change the facts about this being an earnings miss.