With so much going on with Best Buy (BBY -0.11%), like buyouts, scandals, and the unsurprising turn toward e-commerce, it may be difficult to know just what to focus on.
To help simplify things, we've created a new premium report on Best Buy that covers the most important aspects of whether the company is a buy, sell, or hold. For a sample of what's included, read on to find out three areas that will be important for any potential Best Buy investors.
The Three Areas You Must Watch
- Margins.
Running a physical location is expensive compared to running a website, and if a bricks-and-mortar company attempts to match prices with those websites, it may quickly find itself drowning in red ink. But if customers pick up accessories along with price-matched goods, as well as warranties and installation services, the tactic could turn around the trends pushing the company toward bankruptcy.
Also, as Best Buy ramps up and bets its future on the mobile store format, margins will give a glimpse into how these new stores perform, and whether Best Buy can successfully transform from big-box locations into more nimble storefronts.
- Free cash flow.
As long as cash flow is positive, Best Buy has a chance. It can keep paying interest on its debt and invest in the transformation of its business model. But if free cash flow drops, look out. The year before Circuit City liquidated its stores, it had negative free cash flow of $371 million.
- Management plans.
Hubert Joly may have a track record for turnarounds, but he has yet to enlighten stockholders on his plans for Best Buy. Also, with the shakeup in management, stability in top positions is key if the company has a chance, especially if it wants to focus on improving culture and customer service.
More in-depth analysis available
That was just a sample of what's included in our new premium report on Best Buy. For more analysis and discussion of leadership, opportunity, and risks, grab your copy now by clicking here.
