1-Star Stocks Poised to Plunge: Best Buy?
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 | $7.4 billion |
Industry | Computer and electronics retail |
Trailing-12-Month Revenue | $50.7 billion |
Management | Interim CEO George Mikan (since April 2012) |
Return on Equity (average, past 3 years) | 17.4% |
Cash/Debt | $1.4 billion / $2.0 billion |
Dividend Yield | 3.1% |
Competitors | Amazon.com |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 22% of the 3,495 members who have rated Best Buy believe the stock will underperform the S&P 500 going forward.
A couple of months ago, one of those Fools, CoreAndExplore, succinctly summed up the bear case for our community: "May get a dead cat bounce at best, otherwise the slide will continue relatively unabated due to dwindling market share (thanks to Amazon, eBay, and other online retailers) and tightening margins. Some big box stores will survive as niche players [in my opinion], but large national chains like [Best Buy] are a thing of the past."
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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Best Buy, Amazon, and Apple. Motley Fool newsletter services have recommended buying shares of Amazon, Apple, and eBay. Motley Fool newsletter services have also recommended creating a diagonal call position in Wal-Mart and a bull call spread position in Apple. 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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