What is the catalyst continuing to levitate this stock in 2x13? Some how they increased their dividend but their fundamentals are still sht with poor guidance. Anyone considering this company overvalued?
Its a strong buyout candidate. Their name always pops up every few months…
Not to mention they have good margins and very little debt.
I’d proposed an LBO if I had the money.
BBY is a perennial dog that is now overvalued as people are smoking large amounts of hopeium. It is not a risk free short because they may find a sucker to buy the company out, but if not, BBY is an inevitable long-term zero. They do not have a business model and the format they are struggling with is very high fixed cost with high capex requirements in a permanently shrinking market share and margin environment. Every major consumer electronics chain since 1950 has been a zero. It is a very, very bad business.
I am not short but I will be, sooner or later.
^my thoughts exactly, the one cause for a runup was a short squeeze but that should have corrected itself already (which it hasnt imo).
Zero - does having little debt in this environment make a company attractive vs equity? Their margins may be good but are they sustainable - i see a trend of using bby as a visualizer then shopping online continuing. I’m not saying you are wrong, but would you consider buying this company at this particular price?
These retailers aren’t going bankrupt because of a bad business model. If that was the case then we wouldn’t see new electronics retailers pop up every few years and turn into chains. Examples: Fry’s, Micro Center & PC Richard’s
Had a circuit city in my town 5 years ago. They went bankrupt and Micro Center came into that location and their business is booming. The fact that you still go to Best Buy to ‘visualize’ the products means consumers still need B&M stores.
Would I buy BBY at these levels? No because I think the company is being mismanaged and unfortunately I can’t control that. For a start they need to fire their website designer and shrink their store sizes…