Best Buy founder splurges on his own stock despite analysts downgrading BBY

Best Buy founder splurges on his own stock despite analysts downgrading BBY
3 weeks ago
2 mins read

Best Buy (NYSE: BBY) shares have lost roughly 20%, in 2022, compared to the S&P 500, which lost 14% year-to-date (YTD). Despite the stock not performing well, the founder of Best Buy, Richard M. Schulze bought up roughly $20 million of the electronics retailer’s shares.

On May 25, Form 4 was filed with the SEC indicating that 250,000 shares were bought up by the Best Buy founder. 

Meanwhile, in its latest earnings report on the same date, the company showed $10.65 billion in revenue, which represented a year-on-year (YoY) decrease of 8.5%; however, it still beat expectations by $220 million. Similarly, earnings per share (EPS) was $1.57, beating estimates by $0.01.

Even so, analysts from Barclays downgraded the stock following the earnings report, citing worries of a consumer slowdown and other macro trends.

BBY chart and analysis 

Towards the end of May, higher trading volumes were noted, which led the shares to bounce off of $70, multiple times possibly creating a new support level. Despite this, shares are now trading below all daily Simple Moving Averages (SMAs), and have been in a continuous downtrend since December 2021. 

BBY 20-50-200 SMA lines chart. Source. Finviz.com data. See more stocks here.

On the other hand, analysts rate the shares a moderate buy, predicting that in the next 12 months, shares may be trading at an average price of $91.27, which is 16.49% higher than the current trading price of $78.35.

Wall Street BBY analysts’ price targets for BBY. Source: TipRanks

Even with the probable headwinds, analysts are citing, shareholders are likely to enjoy the dividend yield the company provides. At the time of writing, the yield stands at 4.79%, which means that shareholders will get $0.88 for each share they own. 

Moreover, there seems to be cautious optimism among banks regarding the state of the U.S. consumer. If spending continues, BBY should be in a good position to recover some of the losses sustained mostly due to worries of a consumption slowdown.  

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. 

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Dino Kurbegovic

Dino is an investor and technology enthusiast with years of experience in managing complex projects. At Finbold he covers stories on stocks, investing, micro and macroeconomic trends. Also, he’s also building a micro solar power plants in his hometown.