Best
Buy is one of the most famous retail companies in the US, even though it
operates in an international, multi-channel environment. It is a retailer of
technological products, with its focus mainly on the US, Canada, China and
Mexico. Basic consumer electronics such as TV sets and home theaters, as well
as digital cameras, players, headphones and navigation products are amongst its
most popular product categories. It is less known for its computing and mobile
phone offerings, even though they take up for a significant amount of its
earnings. They include notebooks, desktop PCs, tablets, phones and others.
In
2013 the company reported revenues of $45085 million, which is an 11.1%
decrease in comparison to the results from 2012. However, there was an
operating loss of $125 million for the company, while in 2012 it had an
operating loss of $1 231 million and revenues of $1085 million. It is important to know that in 212 Best Buy
changed its year-end from the Saturday closest to the end of February to the
one closest to the end of January, which began in 2013.
The
operations of the company are divided in two main segments, which are based on
its geography presents in different areas. However, from a financial point of
view it is easier to look at its revenues on the basis of its product
categories. There are six of them, with definite dominance of two. The mobile
phones segment accounts for 48.4% of the total revenue for 2013, while consumer
electronics for 29.1%. Entertainment was 8.4%, while appliances and services
combined accounted for around 14%. The high reliability on the phone segment
increases greatly the beta of the company with regards to the state of the
mobile phone market. However, with increasing demand the environment is
definitely benevolent towards the US retailer to increase its market share.
Best Buy stock quote is $25.75 for the 9th of May
2014. It is close to the figure from 12 months ago - $26.60 and it can be seen
that in the course of the last quarters there were some very interesting times
for the shareholders. In November 2013, the BBY stock prices reached almost $44 and remained high up to the end
of January, when they were $37. However, with the release for the end of the
2013 financial year the prices plummeted to $24.43 and have been around that
number ever since. With an EPS of $1.53 and a dividend yield of 2.70% the
company definitely has something to offer to investors, yet reduced confidence
with the recent plunge and with only long-term shareholders holding their stock
the BBY stock value seems to remain
stable.
Despite
questionable performance, 12 month forecasts are hopeful for the company’s
future. The median target is $34, which is a 32%.09% increase since the last
price when the market closed and the upper estimate is $47. However, the lowest
one is $18, which shows a very high variance in analysts’ expectations. Nevertheless, recommendations from polled
investment analysts are that Best Buy Co.,
Inc. shares will perform better in the next several months and that in the
next quarter, which is historically the most lucrative for the company, they
will go up rapidly as they did last year. Such prognosis have caused a lot of
speculations, yet it is true that based on previous year performance the
holiday period is the strongest both for the company and the retail sector.
No comments:
Post a Comment