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Retailers are In Focus on Cyber Monday

David Becker
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Sale over the Thanksgiving weekend actually declined this year, but analysts believe that online sales over the next week will move than make up for the decline, allowing brink and mortar companies to continue to generate solid returns into the year end.

Thanksgiving weekend retail sales slipped this year according to industry reports. Consumers spent an estimated $57 billion over the Thanksgiving weekend, down 2.7% from last year, according to the National Retail Federation. However, the number of shoppers increased to 141 million people from 139 million. Despite the reported decline, online sales climbed 17.3% on Thanksgiving and Black Friday, according to ComScore estimates. Cyber Monday will likely increase the demand for discounts allowing the internet shopping spree to continue.

Best buy has been a solid performer over the last couple of month climbing nearly 50% since June of 2013. Sales have been robust and the retailer has set up a competitive online presence. The company has a 52-week range of $11.20 – $44.66. They have a PE ratio of 16 and debt to equity of 38%. Quarter over quarter earnings was very impressive climbing 350% while the 3-year growth rate of earnings declined 15%. Sales last quarter were flat quarter over quarter while the three year growth rate of sales was down 5%. The profit margin for the company is 3.2% and the dividend yield is 1.7%.

The technical are solid for BBY. Price action is positive as BBY has recaptured the 50-day moving average near $40.50. Momentum is negative as the MACD (moving average convergence divergence) index is printing in negative territory but the trajectory is flattening and could generate a buy signal in the near future. The relative strength index( RSI ) is printing near 50 which is in the middle of the neutral range and reflects a consolidative tone.

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