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Best Buy Co Inc (BBY) Stock Could Pull It off After All

This electronics retailer is stepping out of the rubble and BBY is staging a comeback

   

Best Buy Co Inc (NYSE:BBY) is the last-standing major electronics and large appliances retailer in the U.S. For a while it didn’t look like any of these stores were going to make it.

HHGregg went down, as did Circuit City and Radio Shack. Then there was the online competition from the likes of Amazon.com, Inc. (NASDAQ:AMZN) that began stealing market share, as well as Wal-Mart Stores Inc (NYSE:WMT) and Target Corporation (NYSE:TGT).

How BBY Stock Turned It Around

BBY was not looking good. It was troubled by the same thing we’re seeing in a lot of retailers today — diminishing same store sales and difficulty creating an online presence. Same-store sales have been the traditional lifeblood of retailers. If you’re not getting the foot traffic then you’re likely not selling products.

But where other saw problems, a new management team at BBY decided to make them opportunities to pivot the company.

It got back to basics. It revamped how it sold, how it treated its workers and how they treated customers. It redesigned the interiors of the stores and was more selective in how and what it displayed. And even before AMZN was pitching same-day delivery, BBY set up same-day pickup. And it integrated its website into the core principles of the turnaround.

The BBY plan was built on the premise that people would prefer to buy big and/or expensive products like TVs, computers, mobile phones and appliances in person. No one is comfortable spending $1000 on a new TV or $2000 for a laptop to have it dropped off at their front door when they’re at work.

Same-day pick-up became a hit. It gave buyer the flexibility of shopping for the products online or seeing them in-store and then buying them with pick-up at their convenience. It was a perfect blend of online and brick-and-mortar advantages.

It also meant that the stores could then sell accessories, so that when people came to pick up their big items, there would be all sorts of things they could buy available to them at pick up.

Bottom Line on BBY Stock

Remember, AMZN is actively working on the idea of buying brick-and-mortar stores in key areas around the country. Having physical items to touch and play with still appeals to most shoppers since they’re paying their hard-earned money for an expensive product and website doesn’t really allow any interaction before you buy a product.

Plus, according to Best Buy, it has stores within 15 minutes of 70% of Americans, which means same-day pickup is incredibly valuable for big-ticket purchases.

All this is continuing to show up in BBY’s numbers. But bear in mind, BBY is up 31% year to date, but a lot of this run is simply enthusiasm for the company’s turnaround.

Numbers are slowly recovering from their hard slog in the past few years. But if this trend continues, it could spell big gains since BBY now has the sector largely to itself.

Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.


Article printed from InvestorPlace Media, http://investorplace.com/2017/06/best-buy-co-inc-bby-stock-could-pull-it-off-after-all/.

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