Best Buy Co., Inc. (BBY), GameStop Corp. (GME), hhgregg, Inc. (HGG): Is This Company’s Stock Destined for Greatness?

However, there’s one obvious reason to appreciate hhgregg in spite of its flaws: It’s still profitable. Recent earnings reports from Best Buy Co., Inc. (NYSE:BBY), RadioShack, and specialty retailer GameStop Corp. (NYSE:GME) all took floundering shares from value to value trap territory, and even prior to those reports, all posted higher valuations than hhgregg:

Source: HGG P/E Ratio TTM data by YCharts.

Conn’s, Inc. (NASDAQ:CONN) doesn’t look good on this chart, so I left it out, but the gist is that it’s been inconsistently profitable and is currently more than three times as highly valued as hhgregg, even though analysts project similar growth for both companies over the next five years. The only real advantage Conn’s has is a better one-year forward growth rate, but even that only pulls its forward P/E roughly in line with hhgregg’s 14 to 16.

The sad fact is that this entire sector of the economy may have little reason to exist as it’s currently constituted. You can buy virtually anything found at Best Buy Co., Inc. (NYSE:BBY), RadioShack, GameStop Corp. (NYSE:GME), or Conn’s online (whether on a certain Bezos-led e-retailer or not), and most of these retailers haven’t shown that they can claim a niche valuable enough to justify investor optimism. Conn’s has a bit more investor appeal in its big-ticket diversity, but there may be room in the market for the appliance-centric hhgregg — if it can attract customers. Its latest earnings report shows that this remains an uphill battle.

Putting the pieces together
Today, hhgregg, Inc. (NYSE:HGG) has some of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy — or to stay away from a stock that’s going nowhere.

The article Is hhgregg’s Stock Destined for Greatness? originally appeared on Fool.com.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology.The Motley Fool recommends hhgregg, and owns shares of GameStop and RadioShack.

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