Best Buy - Final Thoughts

Ticker Symbol: BBY

Final Thoughts

Discretionary spending has taken a huge hit as the economy continues to weaken. The dramatic increase in unemployment, coupled with a decline in consumer sentiment, is wreaking havoc with margins at the nations' largest retailers. Most analysts expect consumer spending to lag going into the first half of 2009, yet lower gas prices could soften the blow that was expected to crush quarterly earnings. A potential short-term impediment for Best Buy is their increasing inventory levels which could cut into margins if the retailer has to increasingly mark down prices. It seems unlikely that Best Buy will break away from the macro trend of stocks trading range-bound while uncertainty prevails throughout the marketplace. Best Buy's long term prospects remain bright with Circuit City falling by the waist side.

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