Best Buy Co., Inc. (BBY) Is Just a Bad Idea Right Now

They described struggling shoppers who are grappling with costs for core essentials like food and gas. Given the time frame, those retailers aren’t feeling too optimistic about the all-important fourth quarter (the holiday season).

That doesn’t exactly sound like a good environment for Best Buy, which relies on discretionary spending on the hottest electronics and gadgets.

And you’d better believe Wal-Mart Stores, Inc. (NYSE:WMT), Target Corporation (NYSE:TGT), and their ilk are going to be courting consumers with aggressive pricing in the coming months, particularly on the types of big-ticket items Best Buy also sells. Last week, Wal-Mart Stores, Inc. (NYSE:WMT) readied its holiday layaway program, announcing that it will waive the $5 fee it previously charged to participate.

Right now, Best Buy’s continued rally implies its fans aren’t even factoring in the macro environment right now, nor the fact that competitors are going to be in yet another cutthroat battle for consumers’ dollars.

Those who have ridden Best Buy shares to recent highs on the “hope play” may want to consider getting out while the getting’s good. Best Buy’s challenges are by no means behind it. And given tidings from some of retail’s most important “barometer” companies, we’re entering into a severely trying period.

Best Buy’s just a bad idea right now.

The article Buying Best Buy Now Is a Terrible Idea originally appeared on Fool.com is written by Alyce Lomax.

Alyce Lomax has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft.

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