Best Buy (NYSE:BBY) is considered a best buy on Wall Street right now. Although the high of the past 52 weeks was $43.19, the stock stumbled to $22.15. From there it started to rise and after third quarter reports this week, shares climbed nearly 9 percent.
The downside is that year to date, value dropped 4.4 percent. Today, at $38.22 still below its 52 week high the share price has room to grow. Earnings per share (EPS) surprised Wall Street by almost doubling to 30 cents. Revenues are close to $9.5 billion. Despite the favorable showing, the company is seeing challenges in international sales related to the currency exchange rate and lackluster sales in China.
Best Buy is a favorite stop for consumers looking for electronics. They’ve been a touch-and-feel brick and mortar store that felt the sting of walk-ins walking out to buy on line. It didn’t take them long to establish their own on-line presence. It is reported that US customers are purchasing 21 percent more on line from Best Buy than previously.
Founded in Minnesota in 1966 by Richard M. Schulze, Best Buy is now led by CEO Hubert Joly. The company continues to find new avenues to draw customers. Best Buy encourages customers to trade in their mobile phones, tablets, and video game software at one of their stores regardless of where they originally purchased them. However, their Buy Back program should be reviewed before anyone gets too excited.
Best Buy isn’t making its profits so much on the latest tablets or cell phones as on gaming, TV’s and appliances. And those profits that make stock purchases look attractive come at a cost. Layoffs have benefited the bottom line.
Fry’s Electronics, a competitor to Best Buy, offers similar products, but its trade in program did not meet with enthusiasm if you read old comments on its forum. A search of their website for “Trade In Program” today finds only book titles, no company program anything like that offered by Best Buy. Hoping for a competitive edge, Fry’s aggressively offers a Price Match Promise, even hanging a banner to that effect on the side of its freeway located store.
The website has a notice regarding a temporary change in its return policy. The company has extended its return time frame for gifts purchased the month preceding Christmas. To encourage holiday gift purchasing, the company has posted Black Friday specials already on its website. As for returns, personal experience at the local store has been positive. Just yesterday, without a hassle, they accepted back a wireless keyboard/mouse combo for a full refund that was purchased within their standard 30 day guarantee.
Fry’s Electronics is privately held, so no stock quotes and no opportunity to buy in if you think highly of their operation. The company was founded by two Fry brothers, John and David, in 1985 as an all-encompassing brick and mortar shop for the high tech professional. Now you can buy everything from stuffed animals to refrigerators to the For Dummies book series for the low tech individual.
Staples, (NASDAQ: SPLS) originally touting itself as an office supply store, now carries a limited, in-store line of computers, cell phones and cameras, with a larger selection on line. Staples offers a service by warraty company SquareTrade which is not a trade in program either, rather another name for a customer purchased warranty. Like all retail establishments with a dwindling physical presence, Staples announced the closure of 225 retail stores early this year. However, its on-line presence is surprising – it is reported to be the second largest on-line retailer after Amazon.
Staples year to date has lost over 13 percent of its value. Still, it is trading up over 7 percent currently. Today saw prices range from $13.685 to $14.04 then wobbling back to the previous day’s close.
There are many choices and reasons to invest in an electronics-based company whether it’s in your favorite shopping mall or on your computer screen. An analyst’s discussion of one of those choices, Best Buy, is presented in a video by CNBC.