How To Trade Best Buy Stock

How To Trade Best Buy Stock
News
Like Us On Facebook
Like Us On Facebook

Shares of Best Buy (BBY) have been declining steadily since December 2010. A major issue for the electronics retailer is that buyers of TVs and other consumer electronics products come to the Best Buy’s stores to browse and then buy the products they like at lower prices from online retailers.

Best Buy stock is down 31.5% over the past 12 months with a five-year average return of -14.9%.

As a result of this terrible performance, the retailer has been trying to stop the bleeding by floating two ideas.

The first is to reduce the number of big-box stores and build new boutique stores similar to the Apple (AAPL) retail locations.

Analysts appear to dismiss this plan, because unlike Apple, Best Buy does not have its own proprietary products.

In addition, consumers of Apple products tend to line up and sleep out in front of Apple stores so that they can the first on their block to own the latest product release.

Back on May 21, Best Buy’s stock slumped to a multiyear low of $17.53. Then in late June there were reports that its founder Richard Schulze was considering putting together a plan to take the company private.

From a June 29 close at $20.96 the stock popped to $23.57 on July 2 as this prospect briefly was the topic of discussion.

My Web site ValuEngine rates Best Buy ($21.14) a BUY, with fair value at $37.45, which makes the stock 43.5% undervalued.

The ValuEngine one-year price target is $23.50. The daily chart for Best Buy shows declining momentum with the stock ending Tuesday above its 21-day and 50-day simple movingaverages at $20.32 and $19.91, respectively.

It’s also below its 200-day simple moving average at $23.70. My weekly value level is $20.46, my quarterly pivot is at $21.14 and my annual risky level is at $26.29.

This morning, Best Buy shares gapped lower at the open and hit $19.93. This was in sympathy with HHGregg (HGG), which plunged more than 20% at the open after announcing lower guidance.

Investors in Best Buy who had a good-’til-cancelled limit order to buy weakness at my $20.46 weekly value level would have been filled at the $19.93 opening price.

The Street

Share Tweet
React
Like Us On Facebook
Like Us On Facebook

Julian Sonny

From the sandy beaches of Hawaii, to the streets of New York: Julian has seen it all. His lifetime of travels has given him a broad scope of knowledge and an eclectic taste unlike any other in the tri-state area. Julian has often been compared to cultural icon, The Rock, because of his unequivocal work ethic and warrior-like stature.

More In News

World Sean Levinson

The Russian Geckos Sent To Space On A Sex Mission Are Now Lost

Russia has lost contact with a satellite carrying five geckos sent into space to have sex over and over again in order to show gravity’s effect on the act. The Moscow Times reports that the Photon-M4, launched on July 19, is still transmitting its location and system status, but not responding to commands from mission […]

Also On Elite

World

The Coziest Cat Ever Has Redefined The Term ‘Catnap’ (Video)

This cat brings a new meaning to the phrase “catnap.” And Moco, this 1-year-old cat, does it right. Watch Moco loe on his back and have his owner — or minion, in his eyes — scratch his belly. Moco’s stretched-out pose perfectly imitates how we all feel after a long day of work or a long […]

Women

The Real Deal: Why The New Batch Of Inspirational Models Is Here To Stay

In an obituary published almost a week ago, The Wall Street Journal celebrated the life of Ford Model Agency founder Eileen Ford, who passed away at the age of 92. Ford was credited not just for being a businesswoman so many years ago, when caring for a family was considered more important than helming a […]

Life

How Netflix Could Actually Be The Best Dating Site Out There

It’s safe to say that basically everyone with access to the Internet has a Netflix subscription. For only $7.99 a month, it would be ridiculous not to pay for this incredible service that allows you to watch a plethora of movies and TV shows at the press of a button. Sure, if Netflix delivered pizza, […]

World

We’re Destined To See The Pinnacle Of Human Prosperity In This Lifetime

This video, the first episode of a five-part series, features George Mason University professor Don Boudreaux explaining how mankind has evolved both individually and as a society over hundreds of years. The animated professor explains how each of the conveniences, from our clothes to our coffeemakers, are the product of the world’s endless quest for […]