This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Widlitz: Best Buy Ticks Off the To-Do List

This column originally appeared on Real Money at 11 a.m. EDT on April 30.

NEW YORK ( TheStreet) -- Best Buy (BBY) has finally boarded a plane and left Europe. Today the company announced the sale of its 50% stake in Best Buy Europe, a joint venture created with Carphone Warehouse in 2008.

Best Buy will receive $775 million (85% in cash) as compared with the original price tag of $2.1 billion. Good riddance to a transaction that falls under the "worst timing ever" category. In addition, I never quite embraced the idea of BBY opening big box stores in Europe under the guidance of a company that had never actually operated big box stores.

Best Buy CEO Hubert Joly has clearly made his list and is checking it twice well before the holiday arrives. The analyst community has followed behind with upgrades as each box is checked off.

We have already heard management talk about rightsizing the organization for a realistic growth trajectory rather than the wishful thinking trajectory. Maybe most important is that there is finally a real sense of urgency to get those lagging online conversion rates in an acceptable place.

Joly has also brought in CFO Sharon McCollam, who is focused on maximizing cash flow. Here's a good example: She returned unproductive inventory to vendors last quarter, which freed up $300 million. Why this had not been done before is a big question mark. And, most recently, rather than holding a grudge, Joly welcomed Richard Schulze back as chairman emeritus after a failed attempt to take the company private. Talk about playing nice in the sand box.

Today, Joly has checked off another item on the analyst community's "most wanted" list. Who needs the distraction of Europe (earnings are immaterial) when the domestic business clearly needs all hands on deck? No doubt a few more upgrades of the stock will follow.

BBY shares are up more than 100%, year to date. Joly and McCollam have ticked off the "to do" list in record time. Now, the next to-do list requires sustainable comparisons and margin stabilization.

At the time of publication, the author had no positions in the stocks mentioned.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 15,660.18 -254.56 -1.60%
S&P 500 1,829.08 -22.78 -1.23%
NASDAQ 4,266.8370 -16.7550 -0.39%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs