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Unformatted text preview: 4 th Annual Siena College Student Conference in Business April 17, 2009 AN IN-DEPTH ANALYSIS OF BEST BUY Rachel Raimo, Siena College Delali Fiadjoe, Siena College Jason Belyea, Siena College Nicolas Duplat, Siena College Camille Jacquemin, Siena College Pierre-Alain Dufêtre, Siena College Kaitlyn Kroslowitz, Siena College Jonathan William, Siena College COMPANY OVERVIEW Best Buy Company Inc. (BBY) PRICE: $33.20 SIENA Target Price: $39.97 S&P500: 815.94 DJIA: 7,776.18 S&P”Industry”: 591.7 Location: South Richfield, Minnesota Industry: Computer & Electronic Retail Description: Best Buy was incorporated in the state of Minnesota in 1966 as Sound of Music, Inc. The company began as an audio components retailer and, with the introduction of the videocassette recorder in the early 1980s, expanded into video products. In 1983, the company changed its name to Best Buy Co., Inc. and began using mass- merchandising techniques, which included offering a wider variety of products and operating stores under a ‘‘superstore’’ concept. In 1989, Best Buy dramatically changed its method of retailing by introducing a self-service, noncommissioned, discount-style store concept designed to give the customer more control over the purchasing process. Today, Best Buy is the world’s 9th largest retailer, and by far the largest retailer i n the computers and electronics segment. Company Website: www.bestbuy.com Market Data Market Cap $13,353,760,000 1 Yr Price App. -25.35% Price to book $2.93 Country USA, Canada, China, Europe Beta 1.43 Industry Computer & Electronic Retail Dividend yield 1.73% Industry Price $15.33 Shares O/S 413,430,000 Industry Beta 1.35 Current price $33.20 Country Risk Premium 9.06% 52 week range $31.61 Risk Free Rate 2.63% Valuation Current 2009E EPS $2.94 $2.46 P/E 11.31 13.51 CFPS $4.68 $4.28 P/CFPS 7.15 7.82 4 th Annual Siena College Student Conference in Business April 17, 2009 One Year Stock Price Performance Bloomberg COMPANY DESCRIPTION 1. Products and Segments Best Buy, Inc. operates retail stores and Web sites under the brand names Best Buy, Five Star, Future Shop, Geek Squad, Magnolia Audio Video, Pacific Sales Kitchen and Bath Centers, and Speakeasy. Through its different brands, Best Buy has offerings in 6 different revenue categories: consumer electronics, home office, entertainment software, appliances, services, and other. During fiscal 2008, the company reported two segments: Domestic and International. The Domestic segment is comprised of all states, districts and territories of the United States and includes store, call center and online operations. It includes Best Buy U.S., Best Buy Mobile U.S., Geek Squad U.S., Magnolia Audio Video, Pacific Sales, and Speakeasy....
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This note was uploaded on 04/06/2012 for the course ECON 202 taught by Professor Sanjeev during the Spring '12 term at Indian Institute Of Management, Ahmedabad.
- Spring '12