Best Buy's most recent trend suggests a bullish bias. One trading opportunity on Best Buy is a Bull Put Spread using a strike $52.50 short put and a strike $47.50 long put offers a potential 11.11% return on risk over the next 29 calendar days. Maximum profit would be generated if the Bull Put Spread were to expire worthless, which would occur if the stock were above $52.50 by expiration. The full premium credit of $0.50 would be kept by the premium seller. The risk of $4.50 would be incurred if the stock dropped below the $47.50 long put strike price.
The 5-day moving average is moving down which suggests that the short-term momentum for Best Buy is bearish and the probability of a decline in share price is higher if the stock starts trending.
The 20-day moving average is moving up which suggests that the medium-term momentum for Best Buy is bullish.
The RSI indicator is at 76.8 level which suggests that the stock is neither overbought nor oversold at this time.
To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here
LATEST NEWS for Best Buy
Here are the 7 biggest industrial projects proposed in Central Florida
Tue, 15 Jan 2019 14:24:00 +0000
It's a great time to build industrial space in Central Florida — if you can afford it. Industrial land is trading at record pricing in the Orlando area with some properties selling for $300,000 an acre, said David Murphy, a senior vice president with CBRE Group Inc. (NYSE: CBRE).
See what the IHS Markit Score report has to say about Best Buy Co Inc.
Tue, 15 Jan 2019 13:01:24 +0000
# Best Buy Co Inc
### NYSE:BBY
View full report here!
## Summary
* Perception of the company's creditworthiness is negative
* Bearish sentiment is moderate and increasing
* Economic output in this company's sector is expanding
## Bearish sentiment
Short interest | Neutral
Short interest is moderate for BBY with between 5 and 10% of shares outstanding currently on loan. This represents an increase in short interest as investors who seek to profit from falling equity prices added to their short positions on January 10.
## Money flow
ETF/Index ownership | Neutral
ETF activity is neutral. The net inflows of $13.43 billion over the last one-month into ETFs that hold BBY are not among the highest of the last year and have been slowing.
## Economic sentiment
PMI by IHS Markit | Positive
According to the latest IHS Markit Purchasing Managers' Index (PMI) data, output in the Consumer Services sector is rising. The rate of growth is strong relative to the trend shown over the past year, and is accelerating.
## Credit worthiness
Credit default swap | Negative
The current level displays a negative indicator. Although BBY credit default swap spreads are decreasing, they are near their highest levels for the past 1 year, which indicates the market's more negative perception of the company's credit worthiness.
Please send all inquiries related to the report to score@ihsmarkit.com.
Charts and report PDFs will only be available for 30 days after publishing.
This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.
Electric Scooter Makers See Sales Opportunities Amid Rental Boom
Fri, 11 Jan 2019 22:21:06 +0000
Makers of electric scooters say the best market opportunity for such short-range transportation systems could be sales of the devices, not rentals. Swagtron and Razor USA were at CES 2019.
Best Buy Stock Is a Strong Trade Ahead of Earnings
Wed, 09 Jan 2019 19:14:38 +0000
In a tumultuous 2018, Best Buy (NYSE:BBY) suffered more than many other stocks. Best Buy stock was down more than 20%, while Walmart (NYSE:WMT) and Target (NYSE:TGT) were barely down. The SPDR S&P Retail ETF (NYSEARCA:XRT) also was flattish and out-performed the S&P 500.
So the 2018 drag on BBY stock is not a general retail problem since those did better than the S&P. Investors clearly have issues with Best Buy. It can't be a matter of valuation, as BBY stock sells at a price-to-earnings ratio of 15. Compare that to Walmart's 54. So it is clear that traders are worried about BBY's prospects.
In 2018 and while equity markets were reeling with fears from tariff and rate hike headlines, consumer spending had been on fire. From that sense, retailers should have done better. The holiday shopping period was stronger than anticipated, especially in the U.S.
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BBY is the "last man standing" among electronic brick-and-mortar retailers, yet Best Buy stock is still struggling. Best Buy has made improvements. It was once considered to be the Amazon (NASDAQ:AMZN) showroom store where people could touch the products before they bought it on AMZN.
This is no longer the case.
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Consensus now is that BBY and other retailers are finally growing their online sales. In this case, they actually could be taking back some sales from AMZN. BBY is perhaps the only brick-and-mortar doing that. Macy's (NYSE:M) or J.C. Penny (NYSE:JCP) are not taking back their clients from Amazon; they are merely taking away from their own remaining foot traffic.
Nevertheless, Best Buy stock still faces a huge problem. Recovering its portion of the pie is one thing, but doing it in a profitable matter that is the ongoing challenge. AMZN built its empire on thin margins like Walmart did decades ago. BBY still has to prove it can compete like that on a similarly thin budget.
Onus is on BBY management to prove the viability of this strategy in the long term. So far, Wall Street is not giving them the benefit of this doubt. So I can't argue for the long-term investment in the stock today. But there still is an opportunity in 2019.
### How to Approach Best Buy Stock Today
Technically, Best Buy stock has more upside potential and could retest $65 per share. It has recently had a nice 20% rally off the lows, but it still has more room to go. The idea is that it probably won't have much resistance until it hits the prior ledge from which it fell apart in early December.
What supports this thesis is that the markets in general are in the process of repairing the crisis of sentiment that we've had all second half of 2018. So Best Buy stock will have the benefit of the general market lift to help it get there. The December employment report was extremely strong, so people in the U.S. are employed. So as long as that continues to be true, consumer spending will remain strong and the economy will be fine.
This would be a trading vehicle and I won't want to turn it into an investment. Meaning I would set appropriate stops below. I would also want to exit before the earnings event. I believe there will be too much uncertainty.
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The 2018 holidays were great so BBY management will be under pressure to deliver on expectations. They'd better show it in the result late February. The March options prices are expecting a +/- $10 move up or down on the headline, so my upside target is within reach if I am correct in my thesis. But on the flip side, I should be ready for another dip below $50.
Other than a short-term scalp, I see no specific reason to chase it for the long term. If it cannot rally with record holiday sales, then I'd rather bet on stocks that have growth on their side. For retail I'd rather chase AMZN or Costco (NASDAQ:COST). These two are up big even when markets have faltered.
Click here and enjoy a free video and more of my market thesis and get an ongoing free copy of my weekly newsletters. Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. You can follow him as @racernic on Twitter and Stocktwits.
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No Reprieve Can Save Sears Stock From the Inevitable
Wed, 09 Jan 2019 13:37:21 +0000
Among iconic American companies, few stand out quite like Sears (OTCMKTS:SHLDQ). But over the last several years, the formerly ubiquitous retailer made headlines for all the wrong reasons. Based on its recent bankruptcy proceedings, Sears stock appeared headed for an ignominious end.
However, a last-minute reprieve may give the deeply embattled company some critical breathing room. Management agreed to review a revised proposal from Sears chairman and former CEO Edward Lampert. Lampert's bid was among several during a bankruptcy auction held on Monday.
The news represented a rare glimmer of optimism in an otherwise bleak environment. Along with the near-complete destruction of SHLDQ stock, the bankruptcy eliminated 68,000 jobs. Lampert's revised bid provides a tight window to save up to 50,000 jobs. It's a long shot, but for impacted workers, they have nothing else.
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The first step? To buy some extra time, Lampert must post a $120 million deposit by 4 p.m. EST today. Roughly $17 million of the total deposit is nonrefundable. This portion will cover the costs in delaying the bankruptcy auction should Lampert's revised bid fail.
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Naturally, Wall Street responded positively to Sears stock, which surged 30% on Tuesday. It's easily one of the biggest moves in the company's history. However, it's more than likely a case of too little, too late.
For one thing, Lampert is no guardian angel. In his original bid, the former head executive wanted his hedge fund, ESL Investments, to buy SHLDQ out of bankruptcy. But in the $4.4 billion proposal, ESL sought to convert $1.3 billion of Sears debt it holds for an equity stake in the newly restructured organization.
Attorney Abid Qureshi, who represents a committee of Sears stock creditors, asserted that dealings between Lampert, ESL and SHLDQ unfairly benefit certain insiders over others.
### Lampert Is Bad News for Sears Stock
I completely agree with Qureshi's concerns. While this whole creditor issue smacks of "rich people's problems," I'm looking at the principle of the matter. Lampert clearly has his personal motives for buying out SHLDQ stock on the cheap.
What drives me crazy about this controversy is that he had a great opportunity to turn the sinking ship around. You can point out Amazon (NASDAQ:AMZN) and its disruptive nature all you want. But during the time Lampert took the reins, Best Buy (NYSE:BBY) began earnestly diving into its rejuvenation strategy.
Through physical restructuring and key investments into lucrative consumer segments, BBY dug its way out of the doldrums. Walmart (NYSE:WMT) achieved similar results through developing its online channels and utilizing its brick-and-mortar footprint to its advantage.
SHLDQ could have easily gone the latter route. Largely through legacy and luck, several Sears stores are located in prime business districts. A few smart decisions could not only have saved Sears stock but tens of thousands of jobs.
Obviously, that's not how things turned out. The reason again points to Lampert. The controversial figure is probably the worst leader in American corporate history. According to Business Insider, Lampert cultivated a culture of fear and intimidation. Step outside the lines, and you will get "shredded."
Typically, most employees have a few salty words for upper management, so I usually take such characterizations with some skepticism. But in Lampert's case, I believe every poor word uttered against him. The man himself has publicly destroyed his own credibility.
A year-and-a-half ago, I criticized the then-CEO for lashing out at the media. Lampert felt that news agencies published "irresponsible" reports about Sears. Apparently, he forgot that he could singlehandedly change the narrative.
He refused, and the public has every right to hold him accountable.
### Revamped End Goal Not Clear
But even if we all slipped through a wormhole and into an alternative universe where Lampert emerged victoriously, I'm not sure how this would benefit Sears stock.
Yes, a good chunk of workers will have their jobs back. Surely, this would improve morale, among other sentiments. But if the underlying issues aren't resolved, we're going to see another bankruptcy pop up.
And what is the core nagging problem? Management refuses to adapt to changing consumer behaviors. Inexplicably, they rested on their laurels while its competitors worked vigorously to address the e-commerce threat.
If Lampert would spend half the effort he expends on yelling at his subordinates toward revitalizing Sears, SHLDQ stock would be in a much different place. But I believe he relishes being a keyboard commando. That's good news for his ego, but a terrible indictment on a once proud American icon.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.
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The post No Reprieve Can Save Sears Stock From the Inevitable appeared first on InvestorPlace.
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