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Here's How Much a $1000 Investment in Best Buy Made 10 Years Ago Would Be Worth Today

How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.

Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.

What if you'd invested in Best Buy (BBY) ten years ago? It may not have been easy to hold on to BBY for all that time, but if you did, how much would your investment be worth today?

Best Buy's Business In-Depth

With that in mind, let's take a look at Best Buy's main business drivers.

Incorporated in 1966 and headquartered in Richfield, MN, Best Buy Company Inc. (BBY) is a multinational specialty retailer of consumer electronics, home office products, entertainment software, communication, food preparation, wellness, health, security, appliances and related services. The company retails technology products in the United States and Canada.

Best Buy operates through two business segments. The Domestic Segment (95.8% of Q3FY23 total revenues) is comprised of the operations, including Best Buy Health business, in all states, districts and territories of the United States under various brand names Best Buy, Best Buy Business, Best Buy Express, Best Buy Health, CST, Geek Squad, GreatCall, Lively, Magnolia and Pacific Kitchen and Home. The International Segment (4.2% of Q3FY23 total revenues) comprised operations in Canada under the brand names Best Buy, Best Buy Express, Best Buy Mobile and Geek Squad.

Domestic and International segments have offerings in six revenue categories.

Computing and Mobile Phones - computing (including desktops, notebooks and peripherals), mobile phones (including related mobile network carrier commissions), networking, tablets (including e-readers) and wearables (including smartwatches);

Consumer Electronics - digital imaging, health and fitness, home theater, portable audio and smart home;

Appliances - including dishwashers, laundry, ovens, refrigerators, blenders, coffee makers and vacuums;

Entertainment - drones, gaming, movies, music, toys, virtual reality and other software;

Services - consultation, delivery, design, health-related services, installation, memberships, repair, set-up, technical support and warranty-related services; and

Other - beverages, snacks, sundry items and other product offerings.

Bottom Line

While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Best Buy ten years ago, you're probably feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in December 2012 would be worth $6,605.64, or a gain of 560.56%, as of December 5, 2022, and this return excludes dividends but includes price increases.

In comparison, the S&P 500 gained 187.51% and the price of gold went up 1.91% over the same time frame.

Analysts are anticipating more upside for BBY.

Shares of Best Buy have outperformed the industry in the past three months. Management focuses on improving the digital capabilities including boosting its omni-channel services, such as buy online and pickup in store services. The company is also making a significant headway in the health space. However, a challenging operating environment and increased promotional backdrop in the consumer electronics industry remain concerns. Hence, the company posted soft results in third-quarter fiscal 2022, with the top and the bottom lines declining year over year, but both metrics beat the Zacks Consensus Estimate. Further, sales declined across both the Domestic and International segments in the quarter. Enterprise comparable sales dropped 10.4% and margins were also weak. For the fiscal fourth quarter, management expects comparable sales to fall 10%.

The stock is up 26.98% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 12 higher, for fiscal 2023. The consensus estimate has moved up as well.

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