bestbuy a stagnant growth electronics retailer with few competitors

Accuracy score :
97%

Best Buy Co Inc  BBY

Summary (from latest annual report and quarterly report 2016) - Fiscal year ends in January

·         Total equity  : 4.42 billion USD

·         Market Cap is 9.8 billion USD ( last price of the stock is 30.30 USD)

·         Best Buy Co Inc is a retailer of technology products, including tablets and computers, televisions, mobile phones, large and small appliances, entertainment products, digital imaging and related accessories

·         Equity of total company increased from 3.98 billion USD in 2014 to 4.42 billion in 2016

·         Company has 1.84 billion USD in cash on account (from latest quarterly report  2016 year)

·          Total equity – cash on account = 4.42 billion USD – 1.84 billion USD = 2.58 billion USD

·         In 2016 company has 1.33 billion USD long-term debt, short – term debt was 44 million USD                                                                                                                                                            (In 2014 company had 45 million USD short-term debt , long-term debt was 1.61 billion USD)

·         In latest quarterly report - total equity increased to 4.42 billion  USD from 3.98 billion USD in 2014, total debt was 1.374 billion USD in 2016)

·         Company's revenue decreased in 2016 to 39.52 billion USD from 40.33 billion in 2015

·         Net income in 2016 was 897 million USD, Net income in 2015 was 1.23 billion USD

·         In 2016 company paid 499 million usd dividend to its shareholders

Best Buy Co Inc  BBY

 

Best Buy is an American multinational consumer electronics corporation headquartered in Richfield, Minnesota, a Minneapolis suburb. It operates in the United States, Mexico, and Canada. All Best Buy Stores in China were closed in February 2011 and merged with Five Star. Best Buy sells consumer electronics and a variety of related merchandise, including software, video games, music, DVDs, Blu-ray discs, mobile phones, digital cameras, car stereos and video cameras, in addition to home appliances (washing machines, dryers, and refrigerators), in a non-commissioned sales environment. Best Buy sells cellular phones with phones from Verizon Wireless, AT&T Mobility, Sprint Corporation, Boost Mobile and T-Mobile US, in regular stores and standalone Best Buy Mobile stores in shopping malls.

In FY 2016, Best Buy operated 1,073 Best Buy and 350 Best Buy Mobile stand-alone stores in the US. Best Buy also operated: 136 Best Buy and 56 Best Buy Mobile stand-alone stores in Canada; and 18 Best Buy stores and 6 Best Buy Express stores in Mexico. Best Buy exited the European market in April 2013. Best Buy operates under the Best Buy, Best Buy Mobile, Geek Squad, Magnolia Audio Video, Insignia and Pacific Sales brands in the United States; the Best Buy, Geek Squad and Best Buy Mobile brands in Canada; Best Buy Mobile and Five Star in China; and Best Buy, Best Buy Express, and Geek Squad in Mexico.

 

 

BBY standalone subsidiaries and acquisitions :

·         The company acquired Magnolia Hi-Fi, Inc., an audio-video retailer located in California, Washington and Oregon, in December 2000 for 87 million USD

·         In January 2001, Best Buy acquired Musicland Stores Corporation, a Minnetonka, Minnesota-based retailer that sold home entertainment products under the Sam Goody, Suncoast Motion Picture Company, Media Play and OnCue brands. Best Buy purchased the company for 425 million USD in cash and the assumption of 271 million USD of Musicland debt

·         In 2002 Best Buy acquired the British Columbia, Canada-based electronics-chain Future Shop Ltd., marking its entrance to the international marketplace. Under the deal, Future Shop was purchased for approximately 377 million USD and continued to operate as subsidiary independent from Best Buy Canada

·         In 2002 Best Buy acquired Minneapolis, Minnesota-based Geek Squad for undisclosed amount ( less than 50 million USD) . Over the past decade, Geek Squad has been a cash cow for Best Buy. The company does not disclose separate financials for the business. But analysts estimate Geek Squad generates a gross profit margin of 40 to 50 percent based on a minimum annual revenue of $2 billion, or about 4 percent of Best Buy's total revenue.

·         In 2006 Best Buy acquired Pacific Sales Kitchen and Bath Centers, the nation's 10th largest white-goods dealer for 410 million USD

·         In May 2006, Best Buy acquired a majority interest in Chinese appliance retailer Jiangsu Five Star Appliance for 180 million USD. The company closed all of its Best Buy-branded stores in China by February 2011, when it merged Best Buy China’s operations with Jiangsu Five Star

·         In March 2007, Best Buy acquired Speakeasy, a Seattle, Washington-based broadband VOIP, data and IT services provider. The acquisition was worth 80 million USD and, under terms of the deal, Speakeasy began operating as a wholly owned subsidiary of Best Buy

·         In 2008 Best Buy acquired Dealtree for undisclosed amount ( less than 50 million USD), Dealtree has been incubating CowBoom as it built the infrastructure and staffed key areas (marketing, merchandising, category management and IT)

·         In 2011 Best Buy purchased The Carphone Warehouse’s share of Best Buy Mobile for 1.3 billion USD

·         In 2011 at the bankruptcy auction, Best Buy acquired Partsearch for 6.1 million USD

·         In December 2011, Best Buy purchased mindSHIFT Technologies, a company that provided IT support for small and medium-sized businesses, for 167 million USD

 

Total = 3.13 billion usd

 

In 2008 Best Buy agreed to buy 50% of the retail division of The Carphone Warehouse, a London, England-based mobile phone retailer, the deal was worth 2.1 billion USD. In April 2013, Best Buy exited the European consumer electronics market when it sold its 50% stake in Carphone Warehouse back to the UK-based mobile phone retailer.The sale was worth approximately 775 million USD

In 2008 Best Buy agreed to acquire Napster for 121 million USD (Best Buy sold Napster to rival Rhapsody in 2011)

 

 

Opinion about the company

Fundamentally it is a good company and in the future we can expect its growth (Total debt is 1.374 billion usd, company has 1.84 billion USD in cash on account, ROE is around 21 %).