Epic Advisors added Best Buy (NYSE: BBY) to their Bottom-Up Analysis model this month. BBY has been the subject of some investor apprehension lately for a few reasons, among them:
- There was a concern that the free shipping promotions offered by competing retailers would make BBY seem less attractive to shoppers.
- The increase in the number of individuals who shop online was considered a potential opportunity for lost sales.
- The long-term viability of BBY’s core business has been was questioned, since much of its income comes from video games, which are now available as instant downloads by other retailers and therefore less likely to be purchased in a brick and mortar store. Also home entertainment equipment is going through a major deflation in price lately.
That said, BBY has a history of sales growth. The company recently authorized a $0.15 dividend payable January 25th and its third quarter financial results showed increased operating income—although it did miss analysts’ expectations.
Todd Shipyards Corp (NYSE: TOD) was added to the Focus Value model on December 20th. On December 23rd, TOD announced that it had entered into an agreement to be acquired by Vigor Industrial. Vigor is extending a tender offer to purchase outstanding shares of TOD for $22.27 per share with a minimum tender condition of about 67 percent. On December 20th, the date TOD was added to the model, Yahoo Finance reported its closing price as $20.59. On December 30th, TOD had a closing price of $22.39. Prior to the acquisition, TOD signed a contract extension with the Navy that will allow it to continue to service the USS Nimitz. This results in a $3,739,714 modification to the original contract.
