Best Buy gets butchered
Shares of the electronics retailer are crashing hard. Should this be the wake-up call that sends investors scrambling?
While many investors have long looked at Best Buy as a business in trouble in light of the changing retail landscape calling the company's business model into question, shares more than doubled in 2013.
In this video, however, Motley Fool analyst Morgan Housel doesn't necessarily think that last year's rally in this stock was due to its turnaround story as a business alone.
He suggests that much of BBY's rockstar performance in 2013 could have been due to short sellers covering their positions in the rising stock, and that fundamentally the business is still deeply troubled. He sees this earnings news as confirmation that the company is having an increasingly harder time competing with the business models of Amazon (AMZN) or Wal-Mart (WMT), that can slash their prices to the bone and make up the difference in volume, something Best Buy just isn't able to do.
Even with the stock off over 25% Thursday, Morgan doesn't see any value play here. He still thinks it looks too pricey after last year's run-up despite cratering Thursday, and considers this much more of a risky speculative play than a long-term investment. Foolish investors should consider staying away from this one.
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99.00 dollars, same price as amazon, walmart etc... I place the order online, drove 10 minutes to the store, picked it up at the counter, no waiting in line.
With so many examples such as mine, why would anyone pay the same and wait days ordering from amazon or the likes?
I think bestbuys back end finncials are the real problem, not the brick and mortar aspect.
Problem with that, is there will BE FEW electronic shops or businesses still open...
THEN your "only CHOICE" will be on-line..
Good luck with all those hassles, BECAUSE that is what it will be in a few years...
Wal-Mart and Staples should just get "cardboard cutouts" to "showroom" in their stores,.,.
With a point of sale Computer to order with..
Isn't that all, the idiots need today.....That buy on-line, a picture and a keyboard..
Why stock any inventory ???
They are simply adorable and loving little things aren't they?
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Bill Stiritz owns more than 5% of the company, and has experienced an estimated $145 million in paper losses on his investment.
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