Through The Fly's Eyes: Best Buy

from Theflyonthewall.com

















Momentum Building In The Electronics Sector

Theflyonthewall.blog has blogging about the E3 conference and about video games in general the past month. Long-time media investor Larry Haverty graced Barron's this weekend with his thoughts on video games, sayingthat Best Buy (BBY) may be a good way to profit from it.

Haverty believes the combination of an upgraded cycle in the video game business and the transition to digital broadcasting will mean good times ahead for Best Buy shareholders. Forecasts for a 12% growth in the video game business for this upgrade cycle is way off with 25% industry growth being more likely as Take Two Interactive's (TTWO) Grand Theft Auto and Microsoft' s (MSFT) Halo 3 hit the market, according to Haverty. This Fly has been finding the same thing, investors are underestimating the potential of this upcycle.

Best Buy has $2.5 billion in net cash, a $5 billion share repurchase program in place, and its competition is in trouble. The stock has been dead money for a while, but Haverty's argument is compelling. It is most definitely worth picking up some Best Buy stock here.