Best Buy Incorporation is a company based in the United States. The company sells a wide range of electronics products through its chain of 1,100 stores across the United States. The company sells products like iPhones, tablets, smart appliances, and many others. The company was founded in 1966.
Why You Should?
- Best Buy has been positively impacted by the pandemic. As people went into quarantine, lockdowns, or a work-from-home environment, more devices and other products were bought by consumers in order to stay comfortable at home. This has benefited the company and its investors.
- Best Buy has recently launched its own membership program, My Best Buy. This membership benefits frequent buyers as they will get rewards and other discounts at the company’s stores. Other companies like Amazon and Walmart have launched their own services (Prime and Walmart+). If this membership program is launched well, then it will benefit the company.
- I think that Best Buy can continue to tap e-commerce opportunities in order to maintain good growth. Younger consumers are increasingly shopping online due to convenience and ease of use. Best Buy can cater to these consumers by further developing its own e-commerce site. This will benefit investors in the company as well.
- The company has seen rising revenues and profits over the past couple of financial years due to the reasons mentioned above. This has helped the company grow across its markets and further develop its stores and products. This has also benefited investors in the company. In the financial year of 2020, the company reported revenues of around 47.26 billion and profits of around 1.8 billion. Both of these metrics are higher than what the company reported in the financial year of 2019 when they had revenues of around 43.64 billion and profits of around 1.54 billion.
Why You Should Not?
- Best Buy faces tough competition in the retail industry. Some of these competitors include Amazon, Walmart, Target, and many others. This competition might hurt the company and its investors in the future.
- Best Buy is not a safe retailer to invest in compared to the likes of Amazon and Walmart. Best Buy does not sell any essential products which mean that in the event of a recession, the company will see a severe drop in sales as people will not purchase devices anymore. This is why I would recommend purchasing stocks in another retailer like Walmart or Amazon.
- Best Buy has started developing its e-commerce site/solutions later than the likes of Walmart and Target. This has hurt the company’s e-commerce growth as they have fallen behind its competitors in this sense. This might hurt the company and its investors in the future.
I think that Best Buy is a decent long-term investor due to positive impacts from the pandemic, a new membership program, e-commerce growth opportunities, as well as rising revenues and profits. However, other retailers like Walmart might be better investments because of Best Buy’s weak e-commerce development, tough competition, and a lack of safety.