Best Buy (NYSE: BBY ) is the top-performing stock on the S&P 500�this year, up more than 117% since the beginning of January. But don't let that performance fool you. This is an ailing retailer to avoid like the plague.
Shares have rallied since last week's announcement that Samsung is installing semi-autonomous stores within each of the electronic retailer's big-box locations. The thought process here is simple: Best Buy has struggled over the past few years with lagging sales, and it needed some type of lift.
As an analyst told Forbes magazine: "[T]he Samsung partnership may boost Best Buy's service experience to electronics customers and help to eventually increase profit margins. If the combined service with Samsung increases customer traffic, it could help Best Buy win back leverage from suppliers such as Apple, boosting overall profits."
Top 5 Retail Companies To Buy Right Now: Tim Hortons Inc.(THI)
Tim Hortons Inc. develops, franchises, and operates quick service restaurants primarily in Canada and the United States. Its restaurants serve coffee and other hot and cold beverages, baked goods, sandwiches, soups, and other food products. As of April 03, 2011, the company and its restaurant owners operated 3,169 restaurants in Canada and 613 restaurants in the United States under the Tim Hortons name; and had 274 primarily self-serve licensed locations in the Republic of Ireland and the United Kingdom Tim Hortons Inc. was founded in 1964 and is based in Oakville, Canada.
Top 5 Retail Companies To Buy Right Now: ING Group N.V. (IDG)
ING Groep N.V., a financial services company, provides banking, investment, life insurance, and retirement services for individuals, families, small businesses, corporations, institutions, and governments worldwide. The company provides savings accounts, mortgage loans, consumer loans, credit card services, and investment products, as well as current account services and payments systems; life and non-life insurance products; asset management products and services; mortgage products; and risk management services. It also offers commercial banking products and services, including lending products, such as structured finance; payment and cash management, and treasury services; and specialized and trade finance, derivatives, corporate finance, debt and equity capital markets, leasing, factoring, and supply chain finance. In addition, the company provides individual endowment, and term and whole life insurance products, as well as traditional, unit-linked, and variable annuity life insurance products for individual and group customers; fire, motor, disability, transport, accident, and third party liability insurance products; employee benefits products and pension funds; retirement services, fixed annuities, mutual funds, and broker-dealer services; and disability insurance products and complementary services for employers and self-employed professionals comprising dentists, general practitioners, and lawyers. Further, the company offers investment management services. ING Groep N.V. operates a network of approximately 280 branches in the Netherlands; and 773 branches in Belgium. The company was founded in 1991 and is headquartered in Amsterdam, the Netherlands. ING Groep N.V. is a subsidiary of Stichting ING Aandelen.
Top 5 Tech Companies To Own In Right Now: The Pantry Inc.(PTRY)
The Pantry, Inc. operates a chain of convenience stores in the southeastern United States. The company?s stores offer a selection of merchandise, fuel, and ancillary products and services. Its merchandise products include cigarettes, grocery and other tobacco products, packaged beverages, beer, and wine. The company operates stores under various selected banners, which primarily include Kangaroo Express. As of September 29, 2011, it operated 1,649 convenience stores located in Florida, North Carolina, South Carolina, Georgia, Alabama, Tennessee, Mississippi, Virginia, Kansas, Kentucky, Louisiana, Indiana, and Missouri; and 233 quick service restaurants. The company was founded in 1967 and is headquartered in Cary, North Carolina.
Top 5 Retail Companies To Buy Right Now: Lowe's Companies Inc.(LOW)
Lowe's Companies, Inc., together with its subsidiaries, operates as a home improvement retailer in the United States, Canada, and Mexico. The company offers a range of products for maintenance, repair, remodeling, home decorating, and property maintenance. It provides home improvement products in the categories of appliances, lumber, paint, millwork, building materials, lawn and landscape products, flooring, rough plumbing, seasonal living, tools, hardware, fashion plumbing, lighting, nursery, outdoor power equipment, cabinets and countertops, home organization, rough electrical, and home fashion, as well as boards, panel products, irrigation pipes, vinyl sidings, and ladders. The company also offers installation services through independent contractors in various product categories. Lowe's Companies serves homeowners and renters primarily consisting of do-it-yourself customers and do-it-for-me customers; and commercial business customers, who work in the construction, rep air/remodel, commercial and residential property management, or business maintenance professions. As of August 15, 2011, it operated approximately 1,725 home improvement stores in the United States, Canada, and Mexico. The company also offers its products through electronic product catalogs and Lowes.com. Lowe's Companies, Inc. was founded in 1952 and is based in Mooresville, North Carolina.
Advisors' Opinion:- [By Hesler]
Lowe's Companies is a home improvement retailer. LOW recently traded at $19.3 and has a 2.9% dividend yield. LOW lost 4.6% during the past 12 months. The stock has a market cap of $25.1 billion, P/E ratio of 13.6 and forward P/E ratio of 10.4. The stock has total debt/equity ratio of 0.38 and Beta of 1.02.
- [By Fitz Gerald]
In Q4 2010, Buffett sold 6.5 million shares at an average price of $23.08. He owns zero shares, currently.
In FY 2011 through January, revenues grew by 3.38% to $48.81 billion, after dropping by 2.09% in FY 2010 and decreasing by 0.11% in FY 2009. The EBT margin improved to 6.61% from 5.98%. GAAP EPS increased by 17.36% to $1.42, after dropping by 18.79% in FY 2009. In FY 2012, analysts expect between non-GAAP EPS to be between $1.65 and $1.79, or increases between 14.5% to 24.3% from the non-GAAP EPS of $1.44 posted in FY 2010. Revenues are also expected to be between $50.3 billion and $53.1 billion, or an increase between 3.0% and 8.7%. The next earnings release is on May 16, when analysts forecast between $0.34 and $0.40, or increases between 8.8% and 17.6% from the non-GAAP EPS of $0.34 for Q1 2010.
LOW shares trade with a price to sales multiple of 0.8. From 2001 to 2006, the multiples were 1.7, 1.2, 1.5, 1.3, 1.3, and 1.0, respectively. It is within the realm of reasonable possibilities for Lowe’s to grow revenues and EPS in the high single digits, so we would say that these shares are undervalued, and should be near 1.0 times sales per share. Keep an eye out for Q1 2011 earnings. The company also has a debt to equity ratio of 0.36.
Top 5 Retail Companies To Buy Right Now: Costco Wholesale Corporation(COST)
Costco Wholesale Corporation operates membership warehouses that offer a selection of branded and private label products in a range of merchandise categories in no-frills, self-service warehouse facilities. The company's product categories include candy, snack foods, tobacco, alcoholic and non-alcoholic beverages, and cleaning and institutional supplies; appliances, electronics, health and beauty aids, hardware, office supplies, garden and patio, sporting goods, toys, seasonal items, and automotive supplies; dry and institutionally packaged foods; apparel, domestics, jewelry, house wares, media, home furnishings, cameras, and small appliances; meat, bakery, deli, and produce; and gas stations, pharmacy, food court, optical, one-hour photo, hearing aid, and travel. It also provides business and gold star (individual) membership services. As of April 26, 2011, the company operated 581 warehouses, including 425 in the United States and Puerto Rico, 80 in Canada, 22 in the Uni ted Kingdom, 7 in Korea, 6 in Taiwan, 8 in Japan, 1 in Australia, and 32 in Mexico. It also has Costco Online, an electronic commerce Web site, at costco.com in the United States and at costco.ca in Canada. The company was formerly known as Costco Companies, Inc. and changed its name to Costco Wholesale Corporation in August 1999. Costco Wholesale Corporation was founded in 1976 and is based in Issaquah, Washington.
Advisors' Opinion:- [By Jonas Elmerraji]
Investors should love Costco Wholesale (COST) in 2013 -- and not just when they're trying to buy ketchup by the gallon. Costco isn't the biggest club warehouse in terms of locations, but it is the best. Costco's 430 locations boast much higher revenues per square foot than competitors like BJ's or Sam's Club (around twice as much, in fact) thanks to a niche of selling bargain-priced big-ticket items. That niche also keeps Costco's customer mix skewed towards "mass affluent" consumers.
Costco operates a membership model, which means that only the firm's 64 million members can shop in its stores. That membership restriction provides Costco with a recurring revenue stream, and (more significantly), a very loyal and sticky customer base. Because consumers are less likely to carry memberships from competing wholesale clubs, Costco's existing base of higher-spending customers gives the firm a shallow economic moat vs. its peers.
Because COST earns the majority of its profits from those membership fees, it's able to charge very low prices for its merchandise. Financially, Costco is in stellar shape. The firm carries close to a billion dollars in net cash, a hefty amount of dry powder for a retailer. As consumers keep spending in 2013, Costco should keep rallying.
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