Best Buy Co., Inc. (BBY), Amazon.com, Inc. (AMZN), and Why This Company’s Stock Has Doubled This Year, and Why It Should Still Be Avoided

Are Samsung stores a sustainable competitive advantage?
As I said, the Samsung move was a good one — but will it really make a big difference? Samsung is trying to find an answer to the popularity of Apple Inc. (NASDAQ:AAPL)‘s wildly successful retail stores. But it’s hard to see a store-within-a-store concept being anywhere near as unique and attractive as Apple’s stores — with a showroom full of products and a Genius Bar to boot.

And then there’s the question of Samsung’s long-term competitive positioning. As Foolish colleague Morgan Housel recently pointed out, companies in Apple and Samsung’s field have a tough business model. There are almost no sustainable competitive advantages. You have to continue to churn out revolutionary products year after year after year.

It’s easy to see how, even though both Apple and Samsung have been very successful lately, one disappointing year could give competition the edge it needs to usurp these leaders.

Get a second Foolish opinion
As it stands today, Best Buy Co., Inc. (NYSE:BBY) hasn’t been profitable over the past 12 months, and revenue is down compared with the previous year. Currently, Best Buy trades for 12 times free cash flow. While that’s not necessarily expensive, there’s still some decent growth priced into the stock — growth I just don’t see happening.

The article Why Best Buy’s Stock Has Doubled This Year, and Why It Should Still Be Avoided originally appeared on Fool.com.

Fool contributor Brian Stoffel owns shares of Apple and Amazon.com. The Motley Fool recommends Amazon.com, Apple, and hhgregg and owns shares of Amazon.com, Apple, and RadioShack.

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