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VIDEOBest Buy Outlook Ahead of First Quarter Earnings
It's been speculated that Blackstone could try to snap up RadioShack, but Best Buy could be a possible buyer, too.
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Best Buy (BBY) seems to be in good shape right now, largely because it sells merchandise that's likely to see demand as the broad economy improves. Appliances, computers, and the plethora of other electronic goods and services it sells often need to be replaced, regardless of the macro environment or downbeat economic data. Its low prices and that vast selection I just mentioned are also bound to make it somewhat irresistible to families on the go that are also looking to stretch their dollars to the max.
Here are some other thoughts I have about the retail electronics company ahead of its first-quarter earnings, which per its website are due out on June 15.
1. Looking back to the fourth-quarter release, this line stood out to me: “The company noted that it has $2.5 billion remaining under its existing board-approved share repurchase authorization and intends to resume share repurchases.” I’ll be interested to see what the company has done in the first quarter, if anything. I think buying back its stock would send a nice sign to investors.
2. Early in the month it was speculated that Blackstone (BX) could try to snap up the popular chain RadioShack (RSH). But I still think Best Buy could be a possible buyer, too, given the depth of its pockets, and I also think it could be a good way for the company to win over electronics consumers who have been loyal to RadioShack or that prefer that smaller-store layout.
3. Back to earnings. Wall Street expects that Best Buy will earn $0.50 per share in the period and I think it could beat by a few cents. Its track record over the trailing four quarters (as far as beating estimates) provides me with a little bit of confidence that I may be right.
4. Again nobody seems to ever mention it except me, but in this environment I think Best Buy’s dividend is interesting. The forward yield is around 1.4%, which isn’t the highest on the Street, but it is a nice little extra.
5. From the data I’m seeing, it appears that in April and May some insiders were nibbling at the stock a little, but I’d like to see a bit more on that front.
Have a great day!
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