Should You Invest in Best Buy?

PHOTO CREDIT: Best Buy

OVERVIEW

Best Buy Co. Incorporation is a company based in the United States. The company sells electronic devices and other related products and services to customers across the United States and some international markets. The company also operates its own e-commerce platform along with a chain of 1,100 stores. It was founded in 1966.

Why You Should?

  1. Best Buy is a great reopening play in an investor’s portfolio. As the economy strengthens and as people go back to work, Best Buy will see an increase in sales as people will have more money to spend on things like electronic devices. This increase in demand in the short to mid-term will benefit the company and its investors.
  2. Best Buy is currently preparing for possibly one of the busiest holiday seasons on record. As people will further increase their demand for electronic devices, Best Buy will continue to see higher sales, something that will help it ost great results. This will also benefit investors in the company.
  3. The COVID-19 pandemic also benefited the company. As people went indoors, the demand for electronic devices soared as people needed a way to work, communicate, and entertain themselves and without meeting in person. This high demand benefited the company and its investors.
  4. The COVID-19 pandemic also caused a massive change in long-term trends. According to the CEO, permanent life changes (like a hybrid work environment and digital entertainment) have further driven demand and growth in the long term. This change in trends will benefit the company’s future growth and will also benefit investors in the company.
  5. Best Buy continues to invest heavily in its e-commerce opportunities to better compete with Amazon and Walmart. For example, the company is starting to sell other electronic devices, like electric bikes, scooters, and mowers. This expansion into e-commerce will benefit the company’s growth in this critical space and will also benefit investors in the company.

Why You Should Not?

  1. The company faces tough competition in the retail industry. Some of these competitors include Amazon, Walmart, Costco, and many others. This competition might hurt the company and its investors in the future.
  2. I think that there are better retailers to invest in other than Best Buy. Companies like Walmart, Amazon, Costco, and Target do have exposure to the sale of electronic devices as well as other categories like outdoor products, groceries, and apparel. These other categories are essential for a retailer to remain stable through rough economic times and maximize growth.

MY OPINION

I think that Best Buy is a good long-term investment option due to its position as a good reopening, play, positive impacts from the pandemic, e-commerce growth, a long-term change in trends, as well as a possible record holiday season. however, tough competition and better retail investments might hurt the company and its investors in the future.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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