Best Buy Co Inc (NYSE:BBY) CEO Hubert Joly is the Rodney Dangerfield of CEOs because he gets no respect. BBY stock investors, though, can still profit from this oversight.
When the Frenchman was named the CEO of the largest consumer electronics retailer in 2012, naysayers grumbled about his lack of retail experience and sent Best Buy stock tumbling 10%.
When Joly took aim at “showrooming” (when customers went to BBY showrooms to look at merchandise only to buy it later for less on Amazon.com, Inc. (NASDAQ:AMZN)) by matching the e-commerce giant’s prices, naysayers thought Joly lost his mind.
He proved them wrong again.
Why Best Buy’s CEO Deserves Respect
Indeed, the Minnesota-based company has more than held its own in one of the toughest markets in retail that has claimed smaller rivals such as Circuit City and HHGregg (OTCMKTS:HGGGQ). It has been profitable for four-straight fiscal years and it has managed to keep sales little changed over the last five years.
Although flat sales are usually nothing to brag about, that’s a win in today’s cutthroat retail environment. BBY stock investors like Joly’s style and have sent shares of the retailer up more than 190% since 2012, yet doubts persist.
Best Buy stock took a 6% nosedive recently amid media reports that AMZN was preparing to create a rival service to the company’s Geek Squad.
That is a huge overreaction since Amazon’s service will only be available in seven locations and it will only focus on the Seattle-based company’s devices, which make up a tiny percentage of all device sales. The Geek Squad will install, repair and fix any device or gadget no matter where it’s bought and provides services both at more than 1,000 BBY stores. It also operates 24 hours a day, 365 days a year.
Bottom Line on BBY Stock
Could AMZN ramp up its service to pose a threat to Best Buy stock? Of course, it could since Amazon CEO Jeff Bezos has more money than God. Success, however, is hardly a guarantee because the price differential in consumer electronics is non-existent thanks to Joly.
I am in the market for a new TV and odds are that I am going to my local BBY because I can see the product I am buying in action. I am old-fashioned in that way. Customer service also is an art as well as a science, which many industries such as airlines and cable companies can never seem to master.
Helping people with their technology problems is even more difficult. I speak from personal experience as a troglodyte who is the “idiot” in question when people speak of whether technology is “idiot-proof.” The Geek Squad has a loyal following among people like me.
As for BBY stock, there is much for investors to like. The stock is currently trading at about a 12% discount to analysts’ average 52-week price target of $60.34.
Joly is keeping Best Buy stock on the cutting edge of relevant trends while keeping a close eye on the bottom line. He has vowed to take out $600 million by the 2021 fiscal year, an ambitious goal for sure.
Investors should buy BBY stock now before this underappreciated CEO gets the respect he deserves.
As of this writing, Jonathan Berr did not hold a position in any of the aforementioned securities.