Investing in Best Buy

Business > Companies
Business > Finance, Investment and Banking

An analysis that illustrates why Best Buy Co, Inc. is considered by most analysts to be a good investment choice in today's difficult retail environment.

1,788 words () | 17 sources | MLA | 2009 United States

Paper Summary:

This paper outlines the history of the Best Buy company as well as its current structure and market position. The paper examines the competitive factors and the company's financial performance, including its stock price, revenue and P/E ratio. The paper concludes that overall, as a long-term investment, Best Buy meets the criteria of a company with good growth potential and appreciation of the value of its stock.

Outline:
Summary
History
Current Structure and Market Position
Competitive Factors
Financials
Conclusion

From the Paper:

"In a struggling retail environment, Best Buy Co, Inc. is still considered by most analysts to be a good investment choice. As of February 6, 2009, many analysts recommend buying the stock (Standard & Poor's) because it has a 12 month median target of $33.00 compared to the current price of $29.84, which projects an increase of over 10% per share (Best Buy Co. Inc. (BBY). Yahoo! Finance). Several reasons exist for this recommendation. First, despite the downturn in the economy, Best Buy's earning power and free cash flow are strong (AOL Money & Finance) and the company has extremely strong brand recognition (Lomax). The company's recent changes in top management (Standard & Poor's) as well as the demise of Circuit City (Standard & Poor's, Barron's) and the company's cuts in expenses (Jacobs) makes the company's future promising. Currently, the stock's valuation is attractive, with a P/E ratio of approximately 11 (Best Buy Co. Inc. (BBY). Yahoo! Finance)."

Sample of Sources Used:

Baker, Mike, et al. Retail Industry '09 Outlook. New York: Deutsche Bank Securities Inc, January 2009.
Best Buy Co., Inc. - Company History. Best Buy Inc. 2003-2008. <http://www.bestbuyinc.com/about/history.htm>
Best Buy Co., Inc. Forbes.com. February 9, 2009. < http://finapps.forbes.com/finapps/jsp/finance/compinfo/Earnings.jsp?tkr=BBY>
Best Buy Co., Inc. Best Buy Co., Inc. Funding Universe. 2004. <http://www.fundinguniverse.com/company-histories/Best-Buy-Co-Inc-Company-History.html>
Best Buy Co. Inc. (BBY). Yahoo! Finance. February 9, 2009. < http://finance.yahoo.com/q/ao?s=BBY>