To: Johnny Canuck who wrote (40912 ) 4/1/2004 11:13:55 PM From: Johnny Canuck Read Replies (1) | Respond to It's called Best Buy (BBY.N), but for much of the last month, investors have seemed more interested in selling the ubiquitous electronics retailer than in buying it. That changed Wednesday, when BBY rallied strongly after reporting stronger-than-expected quarterly income and raising guidance. For the quarter ended Feb. 28, net income leapt 51 percent, to 469 million ($1.42 a share), up from $311 million (96 cents a share) a year earlier. Analysts generally applauded. Upgrading the stock from "hold" to "buy," David Schick of Legg Mason cited three reasons for his bullishness. First, its "customer-centricity" program is giving it competitive advantages over rivals in selling high-margin products such as flat-screen televisions, Schick writes. Second, fears of a price war with Circuit City (CC.N) (which also rallied Wednesday on strong results) have abated, as both players' inventories have "come under control," the analyst argues. Third, the company's valuation is compelling because of its strong cash position. "BBY exited Q03 with $2.6 billion in cash, up from $1.9 billion a year prior. BBY now has roughly $8 per share of cash and $6.50 per share of cash net of long-term debt," Schick writes. Stripping away net cash, he adds, the company trades at a steep discount to its peers and the broader market.[Harry: I need to listen to this CC to see where the strenght is. ATYT said computer laptop sales were stronger than expect though still depressed. AUO and PXLW would suggest LCD screen and TV's a doing alright. GTW would suggest there is some weakness in desktop computers. So where is the beef?!?!?]
