Bottom for Best Buy?
Best Buy (BBY) has lost more than 1/3 of its market cap over the past two trading sessions. Justified or overdone?
Depends on how you view it. More importantly were you in the stock before the earnings call? If you were you are probably never investing in BBY again, I don't blame you.
The general consensus is Best Buy is in for more pain. Thus the stock could keep dropping. I for one am willing to take a chance on the massive pullback.
Cramer said wait for the second day drop. That was Friday (Jan 17th) and it shed another 9%. Now what?
Folks Best Buy is not dead. For those who didn't gamble on the earnings call, this is a vulture play. Buy the stock now that it has been hammered. Put in tight stop/loss limits for yourself. If the stock is a falling knife then wait for an absolute bottom. I think BBY is going to bounce 2% when the market opens back tomorrow (Jan 21st).
Besides missing earnings BBY expects operating margin excluding items to be 175 to 185 basis points lower in the fourth-quarter than compared to one year earlier. Best Buy did report that domestic online revenue totaled $1.32 billion, while comparable online sales rose 23.5%.
If you are a bottom feeder like myself then this presents an opportunity for traders. I took a small position today and will wait for next week's action to determine if I will buy more. Some analysts cut their target prices on Best Buy to around mid $30's. I'm game for that and believe in 12 months BBY will be up $10 from today's $24 price.
Best of the Blogs
Scanning and identifying the best blog entries every hour
- The Origins and Implications of the Scottish Referendum | Financial Sense
- "This Is About As Good As Things Are Going To Get For The Middle Class" | ZeroHedge
- I’M DOING THE OPPOSITE | iBankCoin.com
- China Moves To Dominate Gold Market With Physical Exchange | ZeroHedge
- PBoC Joins Other Major Central Banks With Unconventional Monetary Policy Action | Financial Sense
- Four Places That Could Become Water Conflict Zones | Financial Sense
- The 'New Normal' American Dream | ZeroHedge
The most relevant financial news and articles from the Internets
- Volvo's New SUV Will Be A Hot Rod That's Easy On The Environment | Business Insider
- Fox's Most Anticipated Fall Show 'Gotham' Is Good, But A Bit Overrated | Business Insider
- Millennial Media Will Acquire Nexage For $108 Million (MM) | Business Insider
- China swim star Sun set to avenge Asian Games upset in... | Business Insider
- CHART OF THE DAY: People Spend Over $9,000 On Alibaba... | Business Insider
- ZAPATISTAS TODAY: These Photos Show Life In A Revolutionary Part Of Mexico | Business Insider
- Thousands of Hong Kong students on strike for democracy | Business Insider