Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of hhgregg (NYSE: HGG ) were up as much as 10% earlier as the electronics retailer was riding the coattails of Best Buy (NYSE: BBY ) following Best Buy's December comparable same-store sales release.
So what: Some might look at today's rally as nothing more than a sympathy movement higher, but it's really much bigger than that since Best Buy often sets the tone for the entire sector. Based on Best Buy's December same-store sales figure of -1.2%, it looks like an open and shut case of another rotten egg. But there's more to the story than just that. Relative to other retailers, Best Buy's results appear strong, which could signal strength across the sector -- including hhgregg. Best Buy also, despite the same-store sales shortfall, stuck to its full-year earnings guidance.
Now what: It's difficult to assume that hhgregg is going to be able to stick to its full-year forecast just because Best Buy did, but as a shareholder in this highly competitive sector that's being eaten alive by Internet retailer Amazon.com, today's news is encouraging. I, for one, haven't exactly been a fan of hhgregg in the past and still feel Best Buy represents the better buy of the two. Needless to say, it should be interesting to see what happens when hhgregg finally does report its third-quarter results in February.
Craving more input? Consider adding hhgregg to your free and personalized watchlist to keep up on the latest news with the company.