Comments on: Why Best Buy Looks Attractive and Eddie Lampert Should Buy Circuit City

By: Anonymous

Anonymous — Mon, 31 Dec 2007 07:27:00 +0000

Lots of coupons, deals & coupon codes related to electronics & computer accessories are available at here at Circuit-City store through CouponAlbum shopping site.....!

By: Chad Brand

Chad Brand — Sun, 24 Jun 2007 18:04:00 +0000

Hi Russ,

Still haven’t sold a single share of Sears. It’s a long term holding for me. There is still a lot of value that has yet to be unlocked and/or noticed by the Street. Lampert is taking his time with it, so some likely will grow impatient, but I’m willing to take the same long term view he is.

By: russ

russ — Sun, 24 Jun 2007 00:05:00 +0000

chad,

Are you still long SHLD?

By: sagacious

sagacious — Thu, 21 Jun 2007 18:51:00 +0000

Best Buy sure looks appropriately named at these price levels (and getting more attractive, down 1% on the day). Back out $5 in cash and short-term investments off the balance sheet (after leaving 1% of sales for working capital needs) and you get something like 13.5 times earnings on the low end of guidance. Meanwhile, management indicated that new store openings are garnering 20% returns, which suggests incremental capital is being deployed well. With the Chairman owning 15% of the company, low debt (less than 10% of capital), ongoing buybacks, and a free cash flow yield (after the capital expenditures needed to maintain operations and fund expansion) of over 5%, there is a lot to like here. Buybacks are a great use for that cash at the current price.

Sure, consumer spending may slow in the short-run, but betting against the consumer has historically been a bad bet over longer time periods. Wal-Mart is a worthy competitor, but its impact will mostly affect the low end. From these levels, I think shares BBY shares offer above-market return potential for years to come.