Best Buy's Grim Future

The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.

John and David have had a negative outlook on Best Buy for some time now. With a difficult future ahead, the company probably should go private. Best Buy continues to struggle. Same-store sales weren't as bad last quarter, but they were still negative. Competitor hh gregg is seeing similar struggles. The macroeconomic environment may be slow right now, but we shouldn't discount the impact of Amazon.com on the industry, nor the progress made by niche retailers like GameStop over time. And let's not forget how iTunes and Netflix changed the way we consume entertainment media, which used to be big sellers at Best Buy. The company is shrinking its square footage, cutting costs, and is bringing in a new CEO, but John and David don't think investors should bank on a turnaround.

Netflix is no longer the darling of Wall Street it once was. But with a potential 600 million customers around the world, could it soar high again? Check out our premium report for both the bull and bear cases on Netflix. Just click here to start.

The Motley Fool has no positions in the stocks mentioned above. David Meier has no positions in the stocks mentioned above. John Reeves has no positions in the stocks mentioned above. The Motley Fool owns shares of Amazon.com, Best Buy, GameStop, and Netflix. Motley Fool newsletter services recommend Amazon.com, hhgregg, and Netflix. 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 Motley Fool has a disclosure policy.


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  • Report this Comment On September 03, 2012, at 11:36 AM, jason092201 wrote:

    ...Best Buy has a grim future but the Fools are all about buying a stock that has almost no earnings, very much slowing growth and a P/E over 300? Sounds like great advice to me! Why is EBAY never included in this conversation? They are currently expanding and carry no inventory unlike Amazon. The Fools are not looking at the whole picture here, there not even looking in the right direction!

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