Investor interest in electronics retailer Circuit City
But while Circuit City's short-term price performance may encourage investors who've watched their company zig, zag, and eventually do little more than track the S&P 500 over the last five years, it may also be worth noting the stock's performance relative to that of chief competitor and market leader Best Buy
The companies' shares have tended to trade in similar patterns in recent years, with Best Buy unsurprisingly afforded a premium for its hard-earned positioning and power. It's notable, however, that while Circuit City's market value has risen nearly 50% this year, Best Buy's has more than doubled.
While Circuit City is the unquestioned second fiddle, it's also arguably done more to improve its financial fortunes in recent years. It's dropped appliance sales, remodeled its stores (many were older and poorly laid out, providing a poor contrast to Best Buy's huge, bright spaces), spun off its CarMax
All of these are legitimate, meaningful, and commendable moves. But with Best Buy last week beating Wall Street's sales growth and quarterly earnings expectations -- and concerns about continually dwindling market share at Circuit City -- it remains clear why investors continue to pay more for the sector's top dog.
Circuit City plans to report results for the fiscal second quarter on September 17.
Dave Marino-Nachison doesn't own shares in any of the companies in this story.