1-Star Stocks Poised to Plunge: Best Buy?

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, electronics retailer Best Buy (NYS: BBY) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Best Buy's business and see what CAPS investors are saying about the stock right now.

Best Buyfacts

Headquarters (founded)Richfield, Minn. (1966)
Market Cap$8.2 billion
IndustryComputer and electronics retail
Trailing-12-Month Revenue$50.7 billion
ManagementCEO Brian Dunn (since 2009)
CFO James Muehlbauer (since 2008)
Return on Equity (average, past 3 years)16%
Cash/Debt$1.2 billion / $2.2 billion
Dividend Yield2.7%
CompetitorsAmazon.com
Apple
Wal-Mart

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 19% of the 3,458 members who have rated Best Buy believe the stock will underperform the S&P 500 going forward.

Earlier this year, one of those Fools, ValueOfTime, summed up the bear case for our community:

I love going in to Best Buy to slobber over all the cool things that are arriving at my doorstep tomorrow compliments of Amazon.com's free 2-day shipping. Best Buy is good for 4 things: Their comical "tech support", The show and tell that a brick-and-mortar store provides, their Geek Squad computer repair (for people who don't know how to use Google search) and the convenience of a nearby electronics store if you need a tech accessory really fast. The amount of tech-savvy people in the world will continue to increase and the amount of tech not-savvy people (e.i. Best Buy shoppers) will decrease. Now would be a good time for Best Buy to buy some of its own "black tie protection" because no warranty covers the damage this company is/will continue to suffer.

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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Apple and Wal-Mart. Motley Fool newsletter services have recommended buying shares of Apple, Amazon, and Wal-Mart, as well as creating a bull call spread position in Apple and a diagonal call position in Wal-Mart. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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