NYSE:BBY
$41.10
(3/19 11:16AM)
+1.6%
| Open | $41.79 |
Mkt Cap | $16.9 Billion |
| High | $42 |
52Wk High | $45.55 |
| Low | $40.8 |
52Wk Low | $31.25 |
| Volume | 7.3 Million |
Avg Vol 10D | 6.5 Million |
Ockham's Rating/Recommendation Summary
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BBY Revenue
Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, BBY the high and low end of the Price to Sales per share ratios are 0.84x and 0.44x respectively.
Notice that BBY's current Price to Sales per share ratio is 0.35x, which is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of $40.12, BBY is 45% below where we would expect to see it. This will beneficially factor into our final analysis of BBY as it is not often that this stock sinks to these levels.
BBY Cash Earnings
As a value investment framework, Ockham Research is similar to a private equity firm in terms of our valuation methods. We are always on the lookout for value in the form of sales and cash numbers. In the case of BBY, Ockham views their current Cash Earnings as significantly below its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for BBY to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 18.77 and a 9.28 low over the same period.
Now that BBY’s current price is $40.12 and its Price to Cash Earnings ratio is 8.31, we are very positive on its outlook from the cash earnings perspective. In fact, BBY is now trading a full 41% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why BBY has great long term potential, the Cash Earnings levels to current stock is one of our primary reasons. But naturally, now we need for the overall market to recognize this disparity.
BBY Dividends
While it is not necessary to pay an attractive dividend or a dividend at all, to receive a positive rating from Ockham, we view dividends as an additionally helpful measure in determining the future potential of any company.
In BBY’s case, the estimated annual dividend is $0.56 resulting in a current dividend yield of 1.40%. Similar to our review of Sales and Cash Earnings per share, we evaluate dividend yields from BBY against the historic high and low levels over the past 10 years. The highest dividend yield from BBY over this period was 3.27% while the lowest dividend yield was 0.00% Given this range, the current dividend yield for BBY is below its historical median and not terribly attractive from this perspective.
What are the Experts Saying? Analysts and BBY on Squawk On The Street
Wall Street analysts can have a huge affect on stocks, and today Squawk On The Street talked about an analysts' opinion in relation to BBY.
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Learn About RazorWire?Yearly Highs and BBY Recently Discussed on Squawk On The Street
Stick with it or dump it? Squawk On The Street discusses what an abnormally high price means for BBY's investors. Take note of Ockham's valaution on the stock as well.
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Learn About RazorWire?The Opening Bell on Fox Business: BBY is Among Most Active Stocks in the News Today
BBY has been one of the most active stocks in the news today, so investors in it will want to pay attention to what is happening.
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Learn About RazorWire?There is Significant News on BBY:Among the Twenty Most Active Stocks in the News
BBY has been one of the most active stocks in the news today, so investors in it will want to pay attention to what is happening.
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Learn About RazorWire?More News Than Normal on BBY from In the Loop
Something important is going on with BBY today, as it is getting a lot of attention on business television and influential blogs.
Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards BBY and think that it will generally perform in-line with the S&P 500. At present, Ockham has a valuation stance of Undervalued on BBY, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Best Buy Company, Incorporated has actually sunk a bit in comparison to the others.
“… I also want to turn to BEST BUY. They're looking at an early gain of 3%. One discretionary name that will not rise is palm as they have opened with a loss of 17%. …”
Looking at BBY's Technicals on National Post Network Blogs
Technicals and reading charts are not our specialty at Ockham, but our news analytics engine, RazorWire, has caputed a discussion of Best Buy Company, Incorporated from a technical standpoint.
Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Best Buy Company, Incorporated will perform just about the same as the index. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, BBY has been less covered in the news compared to the rest of our universe of stocks. We consider BBY as Undervalued at the current price of $41.80. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise. Check the news on this stock because there is a catalyst that has allowed this stock to advance 5.56% today.
“… BEST BUY gained 4% after Goldman Sachs upgraded the stock from Market Perform to Buy. TD Newcrest upgraded Telus from Buy to Action Buy and downgraded BCE from Speculative Buy to ... …”
Analyst Opinion on BBY the Topic for Tech Trader Daily-Barron's
Wall Street analysts can have a huge affect on stocks, and today Tech Trader Daily-Barron's talked about an analysts' opinion in relation to BBY.
Based on our methodology, Best Buy Company, Incorporated should hold some appeal to value investors as we view it as Undervalued. Ranking all stocks in terms of news coverage offers some interesting data. In the case of BBY, it is getting significantly more attention in recent news coverage than we are used to seeing. The latest news on BBY has created quite a stir as the stock is trading $2.16 higher in today's session. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral.
“… BEST BUY (BBY) shares are getting a boost this morning after Goldman Sachs analyst Matthew Fassler upped his rating on the consumer electronics retailer’s shares to Buy from ... …”
News Breaking on Best Buy Company, Incorporated on Squawk On The Street
Staying informed on the news is invaluable for investors, and RazorWire has captured a recently discussion on BBY from Squawk On The Street.
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Learn About RazorWire?BBY and Analysts' Opinion Discussed on In the Loop
Wall Street analysts can have a huge affect on stocks, and today In the Loop talked about an analysts' opinion in relation to BBY.
At present, Ockham has a valuation stance of Undervalued on BBY, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. Take notice of the news on this stock because it is up $2.10 since the close of trading yesterday. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Best Buy Company, Incorporated has actually sunk a bit in comparison to the others. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards BBY and think that it will generally perform in-line with the S&P 500.
“… In other mover in the pre-market today is BEST BUY. It is up more than 3% this morning. Sheila, you have been looking at the stock. …”
Interested in BBY? See What the Pundits Said on Squawk Box
Best Buy Company, Incorporated is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Squawk Box.
In comparison to the other stocks that we follow, Best Buy Company, Incorporated has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards BBY and think that it will generally perform in-line with the S&P 500. At present, Ockham has a valuation stance of Undervalued on BBY, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue.
“… BEST BUY upgraded to buy from neutral at goldman sachs. Kohls estimate raised at jpmorgan following a meeting with management. …”