1-Star Stocks Poised to Plunge: Best Buy?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, electronics retailer Best Buy (NYSE: BBY  ) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Best Buy's business and see what CAPS investors are saying about the stock right now.

Best Buy facts

Headquarters (founded) Richfield, Minn. (1966)
Market Cap $8.2 billion
Industry Computer and electronics retail
Trailing-12-Month Revenue $50.7 billion
Management CEO Brian Dunn (since 2009)
CFO James Muehlbauer (since 2008)
Return on Equity (average, past 3 years) 16%
Cash/Debt $1.2 billion / $2.2 billion
Dividend Yield 2.7%
Competitors Amazon.com
Apple
Wal-Mart

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 19% of the 3,458 members who have rated Best Buy believe the stock will underperform the S&P 500 going forward.

Earlier this year, one of those Fools, ValueOfTime, summed up the bear case for our community:

I love going in to Best Buy to slobber over all the cool things that are arriving at my doorstep tomorrow compliments of Amazon.com's free 2-day shipping. Best Buy is good for 4 things: Their comical "tech support", The show and tell that a brick-and-mortar store provides, their Geek Squad computer repair (for people who don't know how to use Google search) and the convenience of a nearby electronics store if you need a tech accessory really fast. The amount of tech-savvy people in the world will continue to increase and the amount of tech not-savvy people (e.i. Best Buy shoppers) will decrease. Now would be a good time for Best Buy to buy some of its own "black tie protection" because no warranty covers the damage this company is/will continue to suffer.

If you want to retire rich, you need to protect your portfolio from any undue risk. Luckily, we've found another retailer we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2012." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Apple and Wal-Mart. Motley Fool newsletter services have recommended buying shares of Apple, Amazon, and Wal-Mart, as well as creating a bull call spread position in Apple and a diagonal call position in Wal-Mart. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 1855178, ~/Articles/ArticleHandler.aspx, 4/16/2014 7:16:38 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement