Opinions John Stephenson
Best Buy Company IncBBYTOP PICKFeb 13, 2014
John StephensonOwned
$24.68
Stock price when the opinion was issued
$76.01
As of Jun 22, 2026. Market Open.
specialty stores
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COMMENT
They've had seven quarters of declining sales. When this reports, will BB get a Target-like market reaction (low expectations, beats, so a strong rally) or will BB get Amazon'd?
Joe TerranovaOwned
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Premium contentPAST TOP PICK
(A Top Pick Nov 17/22, Up 0.5%)Stockchase Research Editor: Michael O'Reilly
Our PAST TOP PICK with BBY has triggered its stop at $70. To remain disciplined, we recommend covering the position at this time. This will result in a net investment gain of 11%, when combined with our previous recommendations.
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DON'T BUY
Made a ton of money during the pandemic. One of the better-run retailers, but can't see how this is a competitive advantage over the long term. Challenging times ahead with e-commerce everywhere, so he'd rather own the WMTs and AMZNs of the world.
Jamie Murray No
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Premium contentPAST TOP PICK
BUY
She owns little retail. Her expectations for BB were so low, like a decline in same-store sales (10.5% decline this quarter, in fact) vs. expectations of a 13% decline. Better than expects, though it's not great. BB is used to managing their consumer electronics inventory, so BB's margins will be hindered compared to Target and Walmart are not as disciplined in managing their electronics inventory. So, there'll be compression in BB stores from promotional activity. Note: computer revenues this quarter are up 23% from Q4 2019, so consumer demand is still there, not dead. Don't forget the power of seasonal spending--and we're on the cusp of holiday spending. This bdoes well for November and December comps.
specialty stores
Premium contentTOP PICK
Stockchase Research Editor: Michael O'Reilly We reiterate BBY as a TOP PICK. The company has worked hard to streamline inventory systems, expand e-sales, and even leased out floor space to major brands to adjust growing inflationary pressure. It has inventory to supply gaming consoles and other key products heading into the holiday period. The stock trades at 9x earnings compared to peers at 36x. It pays a good dividend (which has grown for 18 consecutive years) and is backed by a payout ratio under 50% of cash flow. We recommend trailing up the stop-loss (from $50.00) to $62.50, looking to achieve $86 - upside over 26%. Yield 4.6% (Analysts’ price target is $86.13)
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Premium contentTOP PICK
Stockchase Research Editor: Michael O'Reilly Despite doom and gloom with inflation and a slow down in consumer spending, recently reported earnings beat expectations by 15% and boast a ROE of 58%. The company has worked hard to streamline inventory systems, expand e-sales, and even leased out floor space to major brands to adjust. The stock trades at 10x earnings compared to peers at 30x. It pays a good dividend, backed by a payout ratio under 30% of cash flow. We recommend placing a stop loss at $50, looking to achieve $86 - upside over 20%. Yield 4.95% (Analysts’ price target is $86.13)
specialty stores
Premium contentTOP PICK
Best Buy is a leading provider of technology products, services and solutions. The company offers expert service at an unbeatable price more than 1.5 billion times a year to the consumers, small business owners and educators who visit our stores, engage with Geek Squad agents or use BestBuy.com or the Best Buy app. The company has operations in the U.S and Canada, where more than 70 percent of the population lives within 15 minutes of a Best Buy store, as well as in Mexico where Best Buy has a physical and online presence. Social media mentions are up 1050% in the past 24h.
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BUY
AHY: Accidental high-yielding stocks that have fallen so far that their dividends now pay huge.
He's gun-shy retail, and BB has plunged from $142 last November to $85 today. Pays a 4.16% yield. Their near-term numbers are less than ideal, but managers have announced positive guidance through more services. Trades at only 8x earnings, maybe the cheapest ever. Shares are so low they are de-risked.
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PAST TOP PICK
(A Top Pick Jun 22/21, Down 11%) Their Q4 was considered soft, but it still beat earnings by 7%. Operating costs went up due to advertising and supply chain. Still a buy for him. They just bought Current Healthcare to create its own telemedicine focused on seniors' care, a growth area, called Best Buy Health. Good valuation, strong earnings and revenues growth in 2022.
specialty stores
Worst performer on the S&P thus far this year. This is a multiyear turnaround. It fell over 35% at the beginning of the year. Earnings were slightly disappointing. It leads in every single category that it has. They are turning around. They have the best price guarantee so a sales associate will match any price on Amazon. Amazon is starting to increase their rates in a way because they now have to charge sales tax in many of the states. There is a lot of low hanging fruit. They have to fix the website, fix customer experience a little bit, but if they can do that, they can selloff their Chinese affiliate which is worth hundreds of millions of dollars. Cheap and thinks it will be 30%-40% higher next year. Dividend yield of 2.67%.