Trade-Ideas LLC identified

Best Buy

(

BBY

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Best Buy as such a stock due to the following factors:

  • BBY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $245.3 million.
  • BBY has traded 3.3 million shares today.
  • BBY is up 3% today.
  • BBY was down 7.4% yesterday.

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More details on BBY:

Best Buy Co., Inc. operates as a retailer of technology products, services, and solutions in the United States, Canada, and Mexico. The company operates through two reportable segments, Domestic and International. The stock currently has a dividend yield of 3.4%. BBY has a PE ratio of 14. Currently there are 7 analysts that rate Best Buy a buy, 2 analysts rate it a sell, and 6 rate it a hold.

The average volume for Best Buy has been 4.1 million shares per day over the past 30 days. Best Buy has a market cap of $10.7 billion and is part of the services sector and retail industry. The stock has a beta of 0.86 and a short float of 11.7% with 3.66 days to cover. Shares are up 0.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Best Buy as a

buy

. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.40, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that BBY's debt-to-equity ratio is low, the quick ratio, which is currently 0.67, displays a potential problem in covering short-term cash needs.
  • BEST BUY CO INC's earnings per share declined by 5.4% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, BEST BUY CO INC reported lower earnings of $2.32 versus $3.53 in the prior year. This year, the market expects an improvement in earnings ($2.90 versus $2.32).
  • BBY, with its decline in revenue, underperformed when compared the industry average of 13.2%. Since the same quarter one year prior, revenues slightly dropped by 4.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The gross profit margin for BEST BUY CO INC is rather low; currently it is at 22.84%. Regardless of BBY's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.51% trails the industry average.

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