Why hhgregg Is Poised to Plunge

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, home-appliances and electronics retailer hhgregg (NYSE: HGG  ) has received a distressing two-star ranking.

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

hhgregg facts

 

 

Headquarters

Indianapolis, Ind.

Market Cap

$452.1 million

Industry

Computer and electronics retail

Trailing-12-Month Revenue

$2.5 billion

Management

CEO Dennis May (since 2003)

CFO Jeremy Aguilar (since 2009)

Return on Equity (average, past 3 years)

16.1%

Cash/Debt

$48.6 million/$0

Competitors

Amazon.com

Target 

Wal-Mart Stores 

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

On CAPS, 20% of the 324 members who have rated hhgregg believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those bears, fellow Fool Matthew Argersinger (TMFMattyA), succinctly summed up the underperform case for our community:

Another big box retailer destined to join the likes of Circuit City, Borders and (soon) Office Depot in the retail graveyard. It's simply too difficult for hhgregg and other companies to compete with mass merchants (such as Target and Wal-Mart) and e-commerce giants (namely Amazon). Investors can say all they want about hhgregg's cash flows and apparent asset value, but if sales are destined to decline over time, there is no helping the company or the stock over the long term.

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