Friday 10 May 2013

Analysis of Best Buy

An American consumer electronics store

Company: Best Buy

Business: Sale of consumer electronics both in stores as well as online.

Active: Very well established in North America, a little in South America and in China.

P/E: -36.4

Their last quarter was seriously bad due to restructuring costs. The price to book I also find too high for my personal taste the same goes for the book to debt ratio. In the last five years they have had a growth of 4.9% which is fully acceptable. The motivated P/E is around 16 to 18. They are paying a dividend of 2.3% which is ok. If one makes some logical calculations then the P/E today is below 10 and would be or at least be very close to a buy.

Conclusion: Today I will not buy it. I would wait until I see the effect of the restructuring and then hope that the stock is still pushed down in value. I do however think that they will pull through.

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