“Cut-to-the-Chase” Recommendations
- Week Beginning -
Monday, August 28, 2017

by Ian Harvey

IMPORTANT NOTE: There is no stop-loss or pre-determined sell price recommended – this is left to the discretion of the individual trader.


OPTIONS TRADES FOLLOW-UP AND RECOMMENDATIONS

Ctrip.Com International Ltd (ADR) (NASDAQ:CTRP)

The Report……

Ctrip.Com International Ltd on Wednesday reported second-quarter net income of $48.2 million, after reporting a loss in the same period a year earlier.

On a per-share basis, the Shanghai-based company said it had profit of 9 cents.

The results topped Wall Street expectations.

The travel services company posted revenue of $953.1 million in the period. Its adjusted revenue was $946.4 million, also exceeding Street forecasts.

Ctrip.Com shares have increased 32 percent since the beginning of the year.

Ctrip.com showed that the company continues to eat up large swaths of the growing market for travel in China.

  • Management reported that the company's presence in lower-tiered cities "improved significantly in the second quarter." Traffic in second-tier cities was up 50% over last year.
  • Through acquisitions and its own development, Ctrip plans to have 6,500 offline travel agencies throughout China by the end of the year, though the franchise model should significantly reduce costs for the company.
  • Direct booking via Skyscanner increased 50% year over year.

CEO Jane Jie Sun reflected on the quarter, saying, "We are pleased with the strong operating and financial results in the second quarter. Ctrip maintained healthy revenue growth and achieved continual improvement in operating efficiency."

The Result……

Ctrip stock initially plunged more than 7% in early trading Thursday, and then partially recovered to close down 2.4%, in response to the company's second-quarter financial release.

Investors were likely disappointed with the third-quarter forecast provided by the company, which was merely in line with analysts' expectations. Ctrip.com also raised concerns that it may be subject to more strict industry regulations going forward, which dampened investors' enthusiasm.

Action to Take…..

Ctrip.Com shares have increased 32 percent since the beginning of the year. And, this report, on the whole, was quite sound. Therefore, the following recommendation to be considered……

** OPTION TRADE: Buy the CTRP OCT 20 2017 55.000 CALL at approximately $0.70. Sell price is left to your own judgment.


Ciena Corporation (NYSE:CIEN)

The Report……

Revenue in the third quarter totaled $728.7 million, up 9% year over year and ahead of the $726.9 million that the Street was expecting. The company posted non-GAAP earnings per share of $0.51, also topping the consensus estimate of $0.49 per share in adjusted profits.

Gross margin was 45%, with an operating margin of 11.3%. Ciena closed out the quarter with $854.2 million in cash and investments.

"We delivered another solid quarter with strong revenue growth and profitability, and we took additional market share through our diversification and innovation leadership," CEO Gary B. Smith said in a statement. "Our continued success, combined with strong fundamental demand drivers that are playing in our favor, is drawing a clear division between the winners and losers in the marketplace."

The Result……

While the results exceeded analysts' expectations for the quarter, investors wondered why the company offered such a tepid forecast for the remainder of the year, which seemed to be at odds with the strong results it produced this quarter.

While the results beat expectations, investors were likely disappointed with revenue outlook for the coming quarter.

Action to Take…..

Again, this report, on the whole, was quite sound. Therefore, the following recommendation to be considered……

** OPTION TRADE: Buy the CIEN OCT 20 2017 23.000 CALL at approximately $0.50. Sell price is left to your own judgment.


Dollar General Corp. (NYSE:DG)

The Report……

Dollar General Corp., the discount store chain, posted better-than-expected sales for its second fiscal quarter and raised the low end of profit guidance for the year. The company said it had net income of $295 million, or $1.08 a share, in the quarter, compared with $307 million, or $1.08 a share, in the year-earlier period. Sales rose 8.1% to $5.83 billion. The consensus was for EPS of $1.09 and sales of $5.80 billion.

Same-store sales rose 2.6%, ahead of the consensus of 1.6%.

Chief Executive Todd Vasos said sales growth was driven by an increase in average transaction amount as well as positive traffic to stores. The company finalized the acquisition of Acquired Stores, adding about 285 new stores to its network.

It is now expecting fiscal 2017 EPS of $4.35 to $4.50, compared with earlier guidance of $4.25 to $4.50. Sales are expected to grow 5% to 7%, while same-store sales are expected to come in at the high end of a range of slightly positive to up 2%. The consensus is for full-year EPS of $4.50 and same-store sales growth of 1.5%.

The Result……

Dollar General Corp. shares rose 1.7% premarket Thursday, after the discount store chain posted better-than-expected sales for its second fiscal quarter and raised the low end of profit guidance for the year.

However, the rot soon set in once the market opened.

This certainly wasn't a bad quarter from Dollar General, but it's obvious the market was hoping for more even as the company continues to outperform its peers in today's challenging retail environment.

Shares have gained 3.6% in 2017, while the S&P 500 (SPX) has gained 9.8%.

Action to Take…..

At this stage it may be prudent to wait and see if there is going to be further fall-out before taking any positive action.


Best Buy Co Inc. (NYSE:BBY)

Refer to the article “Best Buy Earnings Report” for all the information in regard to the report and result.

Action to Take…..

Again, let us wait and see what transpires before taking any further action.

Since the report the stock price has remained stagnant.



Option Trade - Ciena Corporation (NYSE:CIEN) Calls

Wednesday, August 30, 2017

** OPTION TRADE: Buy the CIEN SEPT 15 2017 24.000 CALL at approximately $1.00. Sell price is left to your own judgment.

Fiber-optic networking technology vendor Ciena Corporation (NYSE:CIEN), is scheduled to be issuing its quarterly earnings data before the market opens tomorrow Thursday, August 31st. Analysts expect the company to announce earnings of $0.49 per share for the quarter, on revenue of $728.74 million and the Earnings Whisper number is $0.51 per share.

Among bullish signs for Ciena is the collapse yesterday of shares of competitor Adva AG (ADV), an equipment vendor catering a lot to Europe and the Middle East, traded on the Frankfurt exchange. Raymond James analyst Simon Leopold, who has an Outperform rating on Ciena stock, thinks Adva is losing share to Ciena, specifically with Amazon (AMZN).

Investor sentiment going into the company's earnings release has 69% expecting an earnings beat The company's guidance was for revenue of $710.00 million to $740.00 million. Consensus estimates are for year-over-year earnings growth of 16.67% with revenue increasing by 8.68%.

Overall earnings estimates have been revised higher since the company's last earnings release.

On April 29, 2017 Ciena Corporation reported its EPS as $0.42 with the analysts projecting the EPS of the stock as $0.38. The company beat the analyst EPS Estimate with the difference of $0.04.

Many analysts have provided their estimated foresights on Ciena Corporation Earnings, with 20 analysts believing the company would generate an Average Estimate of $0.49.

Whereas they predicted High and Low Earnings Estimate as $0.53 and $0.46 respectively. While in the same Quarter Previous year, the Actual EPS was $0.42.

Analysts are also projecting an Average Revenue Estimate for Ciena Corporation as $726.84 million in the Current Quarter. This estimate is provided by 19 analysts.

The High Revenue estimate is predicted as 737.00 million, while the Low Revenue Estimate prediction stands at 715.90 million. The company’s last year sales total was 670.55 million.

For the Current Quarter, the growth estimate for Ciena Corporation is 16.7%, while for the Next Quarter the stock growth estimate is 31.8%.

In the past 5 years, the stock showed growth of 53.32% per annum.

Analysts and Hedge Funds Opinions

Ciena Corporation‘s stock had its “outperform” rating reissued by investment analysts at Raymond James Financial, Inc. in a research note issued to investors last Thursday.

Several other analysts have also recently commented on the company…..

  • Stifel Nicolaus raised Ciena Corporation from a “hold” rating to a “buy” rating and upped their price target for the company from $24.00 to $28.00 in a report on Monday, May 22nd.
  • Instinet reaffirmed a “buy” rating and set a $30.00 price target (up from $27.00) on shares of Ciena Corporation in a report on Saturday, June 3rd.
  • ValuEngine raised Ciena Corporation from a “hold” rating to a “buy” rating in a report on Thursday, July 6th.
  • UBS AG reaffirmed a “buy” rating and set a $31.00 price target (up from $29.00) on shares of Ciena Corporation in a report on Monday, June 5th.
  • Finally, B. Riley reissued a “buy” rating and issued a $34.25 target price on shares of Ciena Corporation in a report on Tuesday.

One investment analyst has rated the stock with a sell rating, seven have issued a hold rating, eighteen have assigned a buy rating and one has assigned a strong buy rating to the company’s stock. The company presently has a consensus rating of “Buy” and an average target price of $31.80.

Several institutional investors have recently made changes to their positions in the stock, to name a few…..

  • BlackRock Inc. boosted its stake in Ciena Corporation by 11,733.7% in the first quarter. BlackRock Inc. now owns 15,755,200 shares of the communications equipment provider’s stock worth $371,979,000 after buying an additional 15,622,062 shares during the last quarter.
  • Vanguard Group Inc. boosted its position in shares of Ciena Corporation by 1.7% in the second quarter. Vanguard Group Inc. now owns 12,466,282 shares of the communications equipment provider’s stock worth $311,906,000 after buying an additional 203,112 shares during the last quarter.
  • TIAA CREF Investment Management LLC boosted its position in shares of Ciena Corporation by 36.4% in the first quarter. TIAA CREF Investment Management LLC now owns 8,553,894 shares of the communications equipment provider’s stock worth $201,957,000 after buying an additional 2,283,352 shares during the last quarter.

Summary

Ciena Corporation’s 50-day moving average is $25.08 and its 200-day moving average is $24.46. The firm has a market capitalization of $3.39 billion, a P/E ratio of 31.53 and a beta of 1.61. Ciena Corporation has a one year low of $18.94 and a one year high of $27.98.


Option Trade - Dollar General Corp. (NYSE:DG) Calls

Wednesday, August 30, 2017

** OPTION TRADE: Buy the DG SEPT 15 2017 80.000 CALL at approximately $1.15. Sell price is left to your own judgment.

Discount retailer Dollar General Corp. (NYSE:DG) is confirmed to report second-quarter results ahead of the market open tomorrow August 31, with the consensus calling for earnings of $1.09 per share on revenue of $5.81 billion. During the same period last year the company reported earnings of $1.08.

Consensus estimates are for year-over-year earnings growth of 0.93% with revenue increasing by 7.75%.

Dollar General has managed to post a small gain for the year, but it hasn’t been smooth sailing. Helping the stock stay in positive territory have been back to back quarterly reports with better than expected numbers for both the top and bottom lines. If the company can extend that streak with its second-quarter numbers, the stock should move higher into positive territory for the year. The market has a consensus for the quarter of $1.09, but the street’s whisper number is slightly higher at $1.11, suggesting most analysts expect another strong quarterly report from the company.

Influencing Factors

Dollar General's commitment toward better price management, cost containment, private label offering, effective inventory management, merchandise and operational initiatives should drive sales and margin trends.

As well, in order to increase traffic, Dollar General is focusing on both consumables and discretionary items. Additionally, the company is expanding its cooler facilities to enhance the sale of perishable items, and is also rolling out DG digital coupon program.

Overall earnings estimates have been revised higher since the company's last earnings release.

Discount retailers typically serve an immediate need and are usually immune from online competition.

DG stock came up short for FY 2017. However, the most recent two earnings reports delivered a pair of positive surprises to help reverse the negative momentum. Furthermore, traders are recently getting enthused about DG’s prospects. On a YTD basis, shares entered into the black starting from late July.

But the biggest potential catalyst for Dollar General stock comes courtesy of its fierce rival Dollar Tree, Inc. (NASDAQ:DLTR). Against a per-share earnings target of 87 cents, Dollar Tree instead delivered 99 cents. Just as importantly, revenues came in at $5.28 billion, beating out its $5.24 billion analyst estimate. The figure also exceeded its year-ago quarter’s haul of $5 billion.

If Dollar Tree’s results are anything to go by, DG stock should produce similar results for its Q2 report.

Analysts and Hedge Funds Opinions

Dollar General‘s stock had its “buy” rating restated by investment analysts at Bank of America Corporation in a report released on Friday. They presently have a $90.00 price target on the stock. Bank of America Corporation’s price target suggests a potential upside of 15.87% from the stock’s current price.

Several other analysts have also recently commented on the company…..

  • Sanford C. Bernstein reissued an “outperform” rating and issued an $88.00 target price on shares of Dollar General Corporation in a report on Wednesday, May 17th.
  • BMO Capital Markets reissued a “neutral” rating and issued a $85.00 target price (up from $76.00) on shares of Dollar General Corporation in a report on Friday, June 2nd.
  • Zacks Investment Research raised shares of Dollar General Corporation from a “hold” rating to a “buy” rating and set a $83.00 target price on the stock in a report on Friday, June 9th.

Two investment analysts have rated the stock with a sell rating, thirteen have issued a hold rating and thirteen have assigned a buy rating to the company’s stock. The company currently has a consensus rating of “Buy” and a consensus price target of $81.96.

Several institutional investors have recently made changes to their positions in the stock, to name a few…..

  • Dorsey Asset Management LLC maintained its position in Dollar General during the second quarter. The firm owned 278,400 shares of the company’s stock at the end of the second quarter.
  • Nisa Investment Advisors LLC boosted its position in shares of Dollar General Corporation by 8.8% in the first quarter. Nisa Investment Advisors LLC now owns 19,390 shares of the company’s stock valued at $1,352,000 after buying an additional 1,570 shares during the period.
  • Nationwide Fund Advisors boosted its position in shares of Dollar General Corporation by 40.5% in the first quarter. Nationwide Fund Advisors now owns 100,662 shares of the company’s stock valued at $7,019,000 after buying an additional 29,024 shares during the period.
  • Korea Investment CORP boosted its position in shares of Dollar General Corporation by 33.7% in the first quarter. Korea Investment CORP now owns 127,581 shares of the company’s stock valued at $8,896,000 after buying an additional 32,148 shares during the period.

Summary

Dollar General Corporation has a one year low of $65.97 and a one year high of $80.67. The stock’s 50 day moving average is $73.82 and its 200 day moving average is $72.86. The company has a market capitalization of $21.01 billion, a price-to-earnings ratio of 17.32 and a beta of 0.93.


Option Trade - Ctrip.Com International Ltd (ADR) (NASDAQ:CTRP) CALL

Tuesday, August 29, 2017

** OPTION TRADE: Buy the CTRP SEPT 15 2017 55.000 CALL at approximately $0.80. Sell price is left to your own judgment.

Ctrip.Com International Ltd (ADR) (NASDAQ:CTRP), a travel service provider for accommodation reservation, transportation ticketing, packaged tours and corporate travel management in China, will report earnings tomorrow,  Wednesday, August 30, 2017 after the market closes. The consensus earnings estimate is $0.20 per share on revenue of $909.07 million and the Earnings Whisper number is $0.24 per share.

Investor sentiment going into the company's earnings release has 82% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 217.65% with revenue increasing by 33.00%.

Oppenheimer Holdings analyst J. Kelly expects that the company will earn $0.16 per share for the quarter, down from their prior estimate of $0.17. Oppenheimer Holdings currently has an “Outperform” rating and a $62.00 target price on the stock. Oppenheimer Holdings also issued estimates for Ctrip.com International’s Q4 2017 earnings at $0.06 EPS, FY2017 earnings at $0.23 EPS, FY2018 earnings at $0.74 EPS, FY2019 earnings at $1.22 EPS and FY2020 earnings at $1.77 EPS.

Analysts and Hedge Funds Opinions

Three analysts have rated the stock with a hold rating, seventeen have given a buy rating and two have given a strong buy rating to the company. Ctrip.com International presently has an average rating of “Buy” and an average target price of $61.41.

Several institutional investors have recently made changes to their positions in the stock, to name a few…..

  • Rbf Capital Llc increased its stake in Ctrip Com Intl Ltd (CTRP) by 61.54% based on its latest 2016Q4 regulatory filing with the SEC. Rbf Capital Llc bought 8,000 shares as the company’s stock rose 23.06% with the market. The institutional investor held 21,000 shares of the miscellaneous company at the end of 2016Q4, valued at $840,000, up from 13,000 at the end of the previous reported quarter. Rbf Capital Llc who had been investing in Ctrip Com Intl Ltd for a number of months, seems to be bullish on the $26.67 billion market cap company.
  • Parallel Advisors LLC boosted its position in Ctrip.com International by 13.0% in the second quarter. Parallel Advisors LLC now owns 2,057 shares of the company’s stock worth $123,000 after buying an additional 237 shares in the last quarter.
  • Highstreet Asset Management Inc. acquired a new position in Ctrip.com International during the second quarter worth approximately $121,000.

Summary

Ctrip.com aggregates hotel and transportation information to enable business and leisure travelers to make bookings. It helps leisure travelers book tour packages and guided tours, and helps corporate clients manage their travel requirements.

Ctrip.com International has a 1-year low of $39.71 and a 1-year high of $60.65. The company has market cap of $27.05 billion. It has a 963.62 P/E ratio.


Option Trade - Chico's FAS, Inc. (NYSE:CHS) Puts

Tuesday, August 29, 2017

** OPTION TRADE: Buy the CHS SEPT 15 2017 8.000 PUT at approximately $0.40. Sell price is left to your own judgment.

Chico's FAS, Inc. (NYSE:CHS), a specialty retailer of women’s private branded, casual-to-dressy clothing, intimates, complementary accessories and other non-clothing items operating under the Chico’s, White House Black Market (WHBM) and Soma brand names, ) is scheduled to report its second-quarter results on August 30. The company is expected to post its results before the market open, with the consensus calling for earnings of $0.21 per share. During the same period last year the company had earnings of $0.25.

Chico’s Fas has struggled for the last year, and with earnings forecast to fall year over year from 25 cents per share to 21 cents, it will be hard for Wall Street to turn bullish any time soon. It posted a negative earnings surprise of 10.3% in the previous quarter.

Chico's stock has fallen 47.0% on the year.

Influencing Factors

Chico’s Fas has been witnessing dismal top-line trends in the last few quarters. Notably, the company has lagged the sales estimates in four of the trailing five quarters. In the last reported quarter, the company posted negative top and bottom-line surprise, while comparable store sales (comps) dipped year over year.

 As well, the company expects comps to decline to a mid-single-digit percentage in fiscal 2017.

The cumulative effect of the soft sales trends is evident on the company's stock price, which has witnessed a 22.2% decline in the last three months. Further, the stock has underperformed the industry’s 17.2% decline.

Analysts and Hedge Funds Opinions

BidaskClub lowered shares of Chico’s FAS, from a sell rating to a strong sell rating in a research note issued to investors on Wednesday, July 19th.

Several other analysts have also recently commented on the company…..

  • Citigroup Inc. decreased their price objective on Chico’s FAS from $18.00 to $13.00 and set a “buy” rating for the company in a research report on Thursday, May 25th.
  • TheStreet lowered Chico’s FAS from a “b-” rating to a “c+” rating in a research report on Tuesday, June 6th.
  • Zacks Investment Research cut shares of Chico’s FAS from a hold rating to a sell rating in a research note on Thursday, May 18th.
  • ValuEngine cut shares of Chico’s FAS from a buy rating to a hold rating in a research note on Friday, June 2nd.
  • Wolfe Research lowered Chico’s FAS from an “outperform” rating to a “market perform” rating in a research report on Thursday, May 25th.
  • Finally, Deutsche Bank AG decreased their price objective on Chico’s FAS from $16.00 to $11.00 and set a “hold” rating for the company in a research report on Thursday, May 25th.

As well insider trading occurred……

Director Ross E. Roeder sold 10,000 shares of Chico’s FAS stock in a transaction dated Monday, June 12th. The stock was sold at an average price of $9.75, for a total transaction of $97,500.00. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link.

Also, Director Ross E. Roeder sold 5,000 shares of Chico’s FAS stock in a transaction dated Thursday, June 1st. The shares were sold at an average price of $9.50, for a total value of $47,500.00.

Summary

Chico’s FAS, has a market capitalization of $1.03 billion, a P/E ratio of 11.41 and a beta of 0.66. Chico’s FAS, Inc. has a 1-year low of $7.52 and a 1-year high of $16.85. The stock has a 50 day moving average of $8.60 and a 200 day moving average of $11.43.


Option Trade - Best Buy Co Inc. (NYSE:BBY) Calls

Monday, August 28, 2017

** OPTION TRADE: Buy the BBY SEPT 15 2017 65.000 CALL at approximately $1.80. Sell price is left to your own judgment.

Electronics and appliance retailer Best Buy Co Inc. (NYSE:BBY) is expected to report its next quarterly earnings report before the market opens tomorrow, Tuesday, August 29th, with the consensus calling for earnings of $0.63 per share on revenue of $8.66 billion and the Earnings Whisper number is $0.69 per share.

Eight analysts have issued estimates for Best Buy Co.’s earnings. The lowest EPS estimate is $0.58 and the highest is $0.67. Best Buy Co. posted earnings per share of $0.57 during the same quarter last year, which suggests a positive year over year growth rate of 10.5%, with revenue increasing by 1.49%.

Analysts expect that Best Buy Co. will report full year earnings of $3.87 per share for the current financial year, with EPS estimates ranging from $3.72 to $4.00. For the next year, analysts expect that the company will post earnings of $4.14 per share, with EPS estimates ranging from $3.41 to $4.48.

Short interest has decreased by 10.3% since the company's last earnings release while the stock has drifted higher by 7.7% from its open following the earnings release to be 23.8% above its 200 day moving average of $49.97. Overall earnings estimates have been revised higher since the company's last earnings release. In fact, the Earnings ESP for BBY is positive, which is a great sign of a coming beat.

Research analysts at Jefferies Group upped their FY2018 earnings per share (EPS) estimates for shares of Best Buy Co. in a report issued on Tuesday. Jefferies Group analyst D. Binder now expects that the technology retailer will post earnings of $3.87 per share for the year, up from their previous estimate of $3.78. Jefferies Group currently has a “Hold” rating and a $60.00 price target on the stock. Jefferies Group also issued estimates for Best Buy Co.’s FY2019 earnings at $4.09 EPS.

Best Buy has done an amazing job with its turnaround program in recent years. The once struggling retailer put a lot of attention in revamping its locations, creating a better customer experience, and boosting its online business. The results have been impressive, and the market has rewarded the stock, which is now trading just shy of its all-time high.

Best Buy shares are trouncing the market heading into this week's earnings report. The stock had plenty of help from a 21% spike in the day following its last quarterly announcement in late May. That report showed healthy sales growth in its core U.S. locations, solid gains in the international division, and a booming online segment. The retailer credited solid demand for smartphones, connected home technology, and gaming devices for the improving operating trends.

CEO Hubert Joly and his executive team raised their full-year sales growth expectations after the surprisingly strong start to the year. They now believe comparable-store sales will rise by 2.5% instead of the initial 1.5% target.

Influencing Factors

Over the past five years the company has managed average annual earnings growth of 26.9%, which seemed impossible back in 2012 and 2013 when “show-rooming” by Amazon.com (AMZN) customers was ravaging the company’s business. Best Buy has proven a strong ability to compete against Amazon, and is one of the few companies to put up such an impressive fight against the e-commerce behemoth.

In recent quarters, the company has enjoyed strong online growth, a result of increased traffic and higher conversion rates. That will likely spill over into the most recent quarter and help drive strong numbers.

The stock’s valuation remains attractive, with a P/E of 16.6, and with earnings expected to rise 11.6% per annum over the next five years there is plenty of additional upside potential for this outperforming stock.

As summer vacation is coming to a close, it's time for students to head back to colleges and schools. This time around, however, back-to-college and back-to-school spending is expected to reach record-high levels as more students are expected to join institutions, and most notably, consumers are regaining confidence. The increased confidence can be attributed to an improving economy and healthy labor market.

As spending levels are poised to scale record highs, retailers have been witnessing an uptick in sales. Retail stocks are already moving north in a relief rally as second-quarter earnings came in better than expected. Given such bullish trends, investing in Best Buy seems to be prudent.

Sound promotional strategies, improvement in merchandise margins along with robust expense management is likely to drive the Best Buy results higher in the second quarter of fiscal 2018. Moreover, the company is making extensive investments to upgrade operations with special focus on developing omni-channel capabilities and strengthening partnership with vendors.

Strong demand for the Nintendo Switch game console and impressive online revenue drove Best Buy’s top-line growth in fiscal 1Q18. Best Buy’s turnaround efforts have helped it survive a tough retail environment where Circuit City and Radioshack vanished.

Best Buy is taking several initiatives to survive in a tough retail environment. The company is focusing on growth categories like smart home. In May 2017, Best Buy announced that it’s introducing a new service called “Best Buy Smart Home,” powered by Vivint, in over 400 stores by the holiday season. The service will allow in-store experts to assist customers in selecting smart home products like smart locks, lights, cameras, and thermostats. The service will also provide expert installation, app-based system control, and a 24/7 professional monitoring service. Best Buy is also focusing on the appliance category.

Best Buy is working to enhance its productivity. In fiscal 1Q18, which ended on April 29, 2017, the company was able to achieve $50 million in annual cost reductions and gross profit optimization. The company aims to touch $600 million in cost reductions by the end of fiscal 2021.

In the past few quarters, the company had reported massive gain in online comparable sales on the back of improved traffic, conversion rates and higher average order values, which is expected to boost results in the quarter to be reported.

In the fiscal second quarter, the company expects domestic comparable sales to rise in the range of 1.5-2.5%, while international comparable sales are projected to be in the range of flat to up 3.0%.

Analysts and Hedge Funds Opinions

As of August 23, 2017, Best Buy stock was rated as a “buy” by 31% or eight out of 26 analysts. Sixteen analysts gave it a “hold” rating, while two analysts gave it a “sell” rating.

Best Buy Co., Inc. was upgraded by investment analysts at BidaskClub from a “buy” rating to a “strong-buy” rating in a note issued to investors on Thursday.

Several other analysts have also recently commented on the company…..

  • Loop Capital restated a “buy” rating and set a $72.00 price target (up previously from $64.00) on shares of Best Buy Co. in a research note on Monday, June 5th.
  • Morgan Stanley upgraded Best Buy Co. from an “equal weight” rating to a “buy” rating and upped their target price for the company from $43.00 to $60.00 in a research report on Tuesday, May 30th.
  • Deutsche Bank AG upgraded Best Buy Co. from a “hold” rating to a “buy” rating and upped their target price for the company from $46.00 to $60.00 in a research report on Tuesday, May 30th.
  • Finally, Credit Suisse Group reiterated a “buy” rating and issued a $60.00 target price (up previously from $47.00) on shares of Best Buy Co. in a research report on Sunday, May 28th.

Several institutional investors have recently made changes to their positions in the stock, to name a few…..

  • Bedrijfstakpensioenfonds Voor DE Media PNO acquired a new stake in shares of Best Buy Co. during the second quarter worth $1,534,000.
  • Mitsubishi UFJ Kokusai Asset Management Co. Ltd. raised its stake in shares of Best Buy Co. by 8.8% in the first quarter. Mitsubishi UFJ Kokusai Asset Management Co. Ltd. now owns 58,302 shares of the technology retailer’s stock worth $2,866,000 after buying an additional 4,732 shares during the last quarter.
  • Geode Capital Management LLC raised its stake in shares of Best Buy Co. by 9.1% in the first quarter. Geode Capital Management LLC now owns 3,494,964 shares of the technology retailer’s stock worth $171,592,000 after buying an additional 292,667 shares during the last quarter.

Summary

Investor sentiment going into the company's earnings release has 62% expecting an earnings beat.

Best Buy Co., Inc.’s 50 day moving average price is $58.19 and its 200 day moving average price is $52.51. Best Buy Co., Inc. has a 52 week low of $36.51 and a 52 week high of $63.32. The firm has a market capitalization of $18.87 billion, a P/E ratio of 16.65 and a beta of 1.45.





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