Negative Factors Cloud Best Buy Co., Inc. (BBY) Stock?

Undoubtedly, Best Buy Co., Inc. (NYSE:BBY) has been one of the most volatile stocks in the market in recent times, and the way it handled Thursday’s volatility suggests the stock may be poised to decline heading into short-terms. The shares dropped -1.37 points or -1.72 percent at $78.26 with a light trade volume of 2.701 million shares. After opening the session at $79.53, the shares went as high as $79.81 and as low as $78.07, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $21.2 billion and now has 270.88 million shares outstanding. Best Buy Co., Inc. (BBY) stock has gained 0.89 percent of market value in 21 trading days.

BBY stock has a trailing 3-year beta of 0.98, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $4.54 a share in the trailing twelve months. The stock’s value has surged 14.3 percent year to date (YTD) against a rise of 38.1 percent in 12 month’s time. The company’s shares still trade -7.24 percent away from its 1-year high of $84.37 and 47.88 percent up from 52-week low of $52.92. The average consensus rating on the company is 2.9, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Best Buy Co., Inc. (BBY) will probably climb 2.56 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $95-month high price target. This represents a whopping 21.39 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $78.5, which represents a return potential of 0.31 percent when compared to the closing price of the stock of $78.26 on Thursday, September 27. The lowest price target for the stock is $58 — slightly more than -25.89 percent from BBY’s current share price.

History has shown that shares in Best Buy Co., Inc. have gone down on 18 different earnings reaction days and are predicted to add 0.07 percent when the company reports upcoming earnings.

Let’s take a look at some insider activity at Best Buy Co., Inc. (NYSE:BBY) and see the pattern. The earliest insider trade took place on 09/12/2018. Watson Mathew parted with a total of 2.13 thousand shares of company at average share price of $77.88. The total for the sales was set at $165.96 thousand. After this transaction, the SVP, Finance-Shared SVCS & CAO account balance stood at 18.13 thousand shares. The stock grew 0.49 percent since that insider sale. On 09/05/2018, Saksena Asheesh, Chief Strategic Growth Officer, sold 26.31 thousand shares at a price per share of $80.07. This removed 2.11 million shares from the insider’s fortune and the stock saw a -2.26 percent retreat in value since the news became public. This transaction left 51.17 thousand shares in the Chief Strategic Growth Officer account.

On 09/04/2018, General Counsel & Secreta Nelsen Keith J performed a sale transaction worth $2.69 million. This sale at $80.38 each has eliminated 33.47 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -2.64 percent decrease since the transaction was reported. The insider now is left with 83.03 thousand shares remaining in the account. Walker Patricia H, who performs the President, Services job, sold 5 thousand shares for $388.3 thousand. The disposal occurred on 08/29/2018 was priced at $77.66 per share. The share price soared 0.77 percent since the reporting date. Walker Patricia H now left with a stake of 21.7 thousand BBY stock worth $1.7 million after the insider selling.

The stock is currently hovering around the first support level of $77.62. Below this, the next support is placed in the zone of $76.97. Till the time, the BBY stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 49.63 on daily chart, which may remain a cause for concern. If the price breaks below $76.97 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $79.36 mark may result into a pull-back move towards $80.45 level.

Shares of Best Buy Co., Inc. (BBY) are trading at a P/E ratio of 17.53 times earnings reported for the past 12 months. The industry BBY operates in has an average P/E of 17.52. Its P/E ratio went as low as 9.73X and as high as 17.07 over the 5-year span.Further, it is sporting a 0.49 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.05. 23.3 percent is the gross profit margin for Best Buy Co., Inc. and operating margin sits at 4.2 percent. Along with this, the net profit margin is 2.4 percent.