BBY Best Buy

Dated 04 Mar 2017

Fundamental

Price

Typical P/E ratio: 14

Intrinsic value:

Best Buy is a retail business. It may be affected by competition from online and overseas China. Earning growth rate is estimated to be 5%.

  • Determine a future stock price.
    Future stock price = Future EPS x Future P/E Ratio
    Future EPS = Present EPS x (1+ EPS growth rate)^number of years
    = $3.25 x (1 + 5%)^5 years
    = $4.15
    Future P/E Ratio is 14.
    Therefore, Future stock price = $4.15 x 14 = $58.07
  • Present Intrinsic Value = Future stock price / (1 + MARR)^number of years
    = $58 / (1 + 15%)^5 years
    = $29

Earnings Date

  1. 01 Mar
  2. 24 May
  3. 23 Aug
  4. 17 Nov

Seasonal

Month Mar Apr May Jul Aug Sep Nov Dec
Week 10-11 15 18-20 27-31 33-37 38 46 50
Trend

Technical

Support Resistance Level

$10, $14, $22, $26, $34, $37, $40, $43, $49

Logs

2017-03-21
BBY has been side way for the last quarter from Jan-Mar 2017, even after the earnings and dividend.
Current it is trading in the middle of the range at $44.54. The VIX is at a low, immediately after the earnings.
VIX is expected to rise from the dividend date to the next earning.
There is probably no big news to move the stock for the next two months.
Queuing up for a Calendar at strike 45 +1 May -1 Apr at a price of $0.59. Spread price is expected to be sold for about $1 if the stock price remains.