Is Best Buy a Good Buy or a Goodbye?

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E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for Best Buy is normal. There is a little room for improvement, but it’s not a number that should create any concern at the moment. The balance sheet, on the other hand, could use a little help.

Debt-To-Equity

Cash

Long-Term Debt

BBY

.49

$309 Million

$2.01 Billion

AMZN

.35

$5.25 Billion

$2.68 Billion

WMT

.73

$8.64 Billion

$57.13 Billion

 

T = Technicals on the Stock Chart Are Weak

Investors in Best Buy over the past three years might have spent portions of their days banging their heads against a cement wall.

1 Month

Year-To-Date

1 Year

3 Year

BBY

-11.14%

-46.40%

-45.61%

-68.36%

AMZN

10.64%

43.96%

37.48%

94.13%

WMT

1.62%

17.88%

20.89%

38.85%

 

At $12.05, Best Buy is currently trading below all its averages.

50-Day SMA

14.92

100-Day SMA

16.56

200-Day SMA

19.01

 

E = Earnings Have Dropped, But Revenue Has Increased

It comes as a shock to many people that revenue for Best Buy has actually increased on an annual basis (for the most part.) However, you will notice a significant slowdown in the pace of that growth. Earnings have dropped considerably.

2008

2009

2010

2011

2012

Revenue ($)in billions

40.02

45.02

49.24

49.75

50.70

Diluted EPS ($)

3.12

2.39

3.10

3.08

-3.36

 

Looking at the last quarter on a YoY basis, we see a decrease in both revenue and earnings.

11/2011

2/2012

4/2012

7/2012

10/2012

Revenue ($)in billions

12.10

16.32

11.61

10.55

10.75

Diluted EPS ($)

.42

-4.70

.46

.04

-.03

 

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