| As the holiday shopping season is days upon us, | | | | which will result in a higher overall domestic |
| investors are trying to locate the perfect gift for | | | | income for America. Since most Americans utilize |
| themselves in the form of rewarding shares. With | | | | a process of a negative savings rate, there is a |
| the launch of the next generation of video games | | | | good chance, relative to most years, consumption |
| upon us as well as the continued advancements in | | | | of luxury goods such as video games or |
| technology for the consumer, there may be no | | | | computers will increase in large margins especially |
| better stock to invest some capital in than Best | | | | during this holiday season. What that means is |
| Buy (BBY). However as the economy is not in a | | | | that margins will dramatically increase in the short |
| stable position, and could be turning for the worst | | | | run for the next few quarters, and if you are to |
| in terms of growth, how long should you hold on | | | | buy shares of this stock now and sell it before |
| to this near perfect equity?To first bring in the | | | | the March earning results poor in, you should see |
| fundamentals, Best Buy really uses its name with | | | | a healthy profit in your portfolio. This is especially |
| conviction not only for its products but for its | | | | true with the video game launches of Wii and PS3 |
| shares as well. Supporting tremendous growth | | | | which should have a tremendous impact as the |
| percentage wise in terms of margins relative to | | | | Gamecube and Xbox did five years ago sprouting |
| revenue and operating income, while much can be | | | | the share price of Best Buy 250% in less than a |
| attributed to strong economic growth, such | | | | year. However, as such an favorable economic |
| deduction does not deviate from the fact that | | | | foundation remains strong now, because there is |
| Best Buy is an excellently managed and run | | | | still slowing down in many parts of the overall |
| company. Producing more total assets than | | | | economy, such growth should not sustain all of |
| liabilities year over year, Best Buy, with a P/E | | | | next year, and it would not be wise to hold on to |
| ratio of near 22, is impressive compared to rivals | | | | this company if a strong recession |
| such as Circuit City who's own P/E is hovering | | | | hits.Nevertheless, if you feel the urge to keep |
| near 26. Granted, the difference may be marginal | | | | your shares, Best Buy, besides one instance |
| and there is a good chance that Circuit City will | | | | (which was the result of a split), has done fairly |
| produce figures similar to Best Buy, the real | | | | well during times of economic slowdown. So while |
| comparison is that over the last six months, Best | | | | I wouldn't advise it, if you must, holding on to |
| Buy has increased about 20% higher in terms of | | | | your shares as a long term investment would not |
| share price, sustaining a lower P/E ratio while | | | | be that terrible to forgone profits.Thus with the |
| Circuit City has been floating around 17 trying to | | | | holiday shopping season approaching rapidly, as an |
| keep even. While such a short term analysis may | | | | investor, the best buy of the season would be |
| not provide the best scrutiny, as over the last | | | | Best Buy shares. With a fantastic fundamentals, a |
| five years both companies have done fairly well in | | | | fairly stronger presence over its competitors, and |
| terms of making investors happy, I feel that Best | | | | a currently favorable economic situation to feed |
| Buy with the strong P/E and stronger | | | | upon, I would not be hesitant to take a short |
| fundamentals should produce happier investors | | | | term risk in locating some luck with Best Buy. |
| relative to its rival.Now, you may be wondering | | | | However, as the economy is always rapidly |
| why I expect Best Buy to produce incredible | | | | changing, and as the happy Christmas season |
| holiday season sales. As recently reported, the | | | | turns into a dreaded long winter, I would start to |
| unemployment rate, currently at 4.4%, remains | | | | be a bit wary about owning shares of this |
| at one of the lowest levels of all time. What that | | | | company past the spring months of 2007, |
| means for shareholders of Best Buy can be | | | | especially if the recession turns to be a hard |
| examined by the consumers who are obtaining | | | | landing.Dennis Biray presents advice on all kinds of |
| these jobs. As the labor force increases, more | | | | topics ranging from finance and investing to |
| consumers are going to be granted employment | | | | fitness to sports. |