Best Buy Co made its IPO on the 20th of October
1996 and is an international retailer in several sectors such as mobile phones,
general electronics, entertainment and home appliances. Its main lines of
business are operated by large retail stores and call centers, as well as
online retail operations including the brand name. In the course of the 2012
fiscal year it had two main divisions – an International and Domestic one. The
domestic is responsible for the facilitation of operations in the US states,
maintaining brand image and keeping the current leading position on the US
market.
The
international division on the other hand is taking care of Canadian operations
– the second main market for Best Buy,
the European branch, where it operates under the brands The Car phone Warehouse
and The Phone House. Recently it also target the Chinese market, entering with
the name Five Star and the Mexican one, again with Best Buy and Geek Squad. By the end of 2012 the company had a reach
of 135 stores in its domestic operations. However, by the end of 2013 it opened
219 new stores across the European and Chinese markets. Nevertheless, 114
stores had to close in different locations across Europe – apparently the
demand for the company’s products is very concentrated in specific locations.
The
main revenue sources for BBY (Best Buy’s
stock market name) were Computing, Entertainment, Home Appliances,
Electronics and services. Video products were amongst the most lucrative
subsectors, including GPS devices, cameras, digital products and Blu-ray
players. In addition to that, sales of MP3 players and other audio devices also
accounted for a substantial amount of its revenues. However, there was a
slowdown in the Computing segment, as other companies dominated the market in
sales of notebooks, desktop computers, mobile phones and other devices.
BBY stock quote from a year ago was $26 and
today it is $25. Best Buy Co., Inc.
stock quotes fluctuated dramatically over the last year, reaching a
dramatic increase of $44 during the holiday season in December, last year. The
lowest value was in February, this year, amounting to $22. There is nothing
unusual about such performance, as companies in the sector are known to have
their revenues focused around several key periods of holidays, when consumer
spending increases. With an EPS of $1.53, which is pretty good for the industry
and a dividend yield of 2.60%, investors’ confidence is definitely stable.
However,
recent changes in the corporate management have raised concern amongst
investors. On the second of May, 2014, Jude Buckley resigned from the company
as a Chief Commercial Officer and his duties were reassigned to the other
divisions of the company, without a new person being appointed. The choice of
the next person to assume the position will be key for the stock performance
and investors are on their toes, with speculation rising with each day about
who will assume the post. The recent dividend of $0.17 per share definitively
improved stability, as well as the purely financial speculations about the Best Buy stocks, yet there are little
expectations about more dividends being released soon, as the company is
financing more and more of its projects internally, with fluctuating stocks.
The most promising market seems to be in China, where company performance has
been boosting, while the EU market is declining in terms of growth with a lot
of competition already assuming leading market positions.
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