I'm continually amazed at the prescience exhibited by the Fool's "communal intelligence" tool, Motley Fool CAPS. In the face of Wall Street opinion that was uniformly bullish on Best Buy (NYSE:BBY), CAPS called the established wisdom into question, assigning the stock a mediocre three stars out of five. Incidentally, CAPS' best investors led the charge, differing with the general bullish view of their investing brethren by a small but significant margin.

This morning, Best Buy missed its earnings target, and the stock is currently down 5%. So what does CAPS tell us about tomorrow's report from Best Buy archrival Circuit City (NYSE:CC)? Let's find out. 

Up or down?
Nearly 300 investors have submitted ratings on Circuit City (this is far fewer than on Best Buy.) Their verdict: "Do you smell something burning? I think we've got a short."

CAPS investors are split down the middle on Circuit City -- 50% like it, 50% loathe it. Our best investors -- the CAPS All-Stars -- lean toward the loathe side of the equation, with 72% of them panning Circuit City. Little wonder that the stock gets just one CAPS star.

Relative to the rest of its CAPS-designated industry subgroup, Circuit City scores low:

Electronics Stores Group

CAPS Rating



GameStop (NYSE:GME)


Best Buy


Circuit City


Rex Stores (NYSE:RSC)


RadioShack (NYSE:RSH)


Wall Street vs. Main Street
In stark contrast to their strong feelings favoring Best Buy, Wall Streeters are decidedly ambivalent on its rival. Of the 11 analysts surveyed, only four expect Circuit City to outperform the market going forward. If that's surprising at all, it's because the stock has in fact underperformed the S&P by a whopping 58 percentage points over the past 52 weeks.

Bull pitch
Most of the bullish pitches on Circuit City are old news, and already proven over-optimistic by events. On the off chance they're ultimately proven right over the long term, here's a quick summary: Circuit City fans like the company's prospects for profiting from the boom in big-screen LCD and plasma TV sales. They also think the stock has been beaten so much with a stick by the big boys on Wall Street, that negative expectations are now more than fully baked-in, and the stock just plain has nowhere to go but up.

Bear pitch
Circuit City bears take a more methodical approach. One of the best pitches, and by a CAPS All-Star to boot, reads like this:

As one who has visited CC as well as other retailers of electronics over the last few years, I am well aware of the shift in merchandising policies at CC over time. The selection in general electronics merchandise has decreased markedly while the floor space for high-end TV systems has increased just as markedly. ...

The shopper for general electronics has been driven off and is now shopping at BBY or even Wal-Mart.

While sales for high-end TV's are good, competition is fierce and these people will NOT be back because such a major purchase will not be made again for a long time. The fierce competition means lower profit margins. When the current surge of TV sales is over, sales at CC will evaporate ...

Who said that?
To learn the identities of the wise Fools who penned these thoughts, and explore the plethora of additional financial data we've put together on the company, just click here.

Best Buy and GameStop are Motley Fool Stock Advisor picks. Claim your free 30-day trial to the service by following this link.

Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 1,300 out of 30,600 rated players. Wal-Mart is an Inside Value choice. The Fool has a disclosure policy.