03Mar10:15 amEST

Best Buy: Exhibit A Why Value Wins Over Growth Going Forward

As market payers all filed into the likes of COST and HD, not to mention LOW or even TGT WMT, the last few years among the big box/volume retailers in a ZIRP/TINA environment, little old Best Buy quietly plodded either sideways or higher well under the radar. 

Best Buy, a name we bought with VIP Members in the long-term investing arm of the service back in early-December 2021, is surging higher this morning after earnings as seen on the BBY daily chart, updated below. 

Mind you, BBY is higher despite fourth-quarter supply chain and staffing hiccups, which could have easily took a wrecking ball to the stock.

Instead, as the stock trades with a PE in the high single digits (no higher than 10, depending on your math) the market rotated into the name. You will note the stark contrast in BBY to a name like OKTA, getting sold despite what some would deem positive earnings numbers last evening. Technically, BBY holding back over its 200-day moving average, currently testing it, would be a wildly bullish development for a name which has been off the radar for most for a while now. 

Going forward, I expect more of this phenomenon--Value will be rewarded even if not perfect numbers, while growth will be punished even if not awful numbers. For us, the point is to glean the valuable market lesson that we have entered a new secular regime of value outperforming growth.

And that does not always mean merely tobacco: Best Buy qualifies as value, too. 

Warning: This is How Advance... Real Assets Get the Biddies

 
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