Finimize - 🍭 Best Buy keeps investors sweet

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Today's big stories

Best Buy reported worse-than-expected results, but investors still sent its shares higher
This might be a turning point for clean energy stocks, and you might want to buy in while they’re still relatively cheap – Read Now
German airline Lufthansa made yet another loss last year

Shelf Belief

What’s Going On Here?

Best Buy reported weaker-than-expected quarterly results on Thursday, but the electronics retailer wasn’t about to let investors lose their motivation.

What Does This Mean?

If you showed up at a Best Buy hoping to sort your holiday gifts last quarter, you might’ve been disappointed: the retailer quickly ran short of all the season’s must-have gadgets, from iPhones to PlayStation 5s. And that’s if you could even get through the front door, with Omicron-driven staff shortages forcing the company to cut its opening hours. So it follows that sales in existing stores were down from the same time the year before.

Best Buy’s profit outlook for this year wasn’t much more encouraging, partly because it’s putting so much money into major projects. But the retailer promised investors that these would pay off in the long term – if they just stick around. And to incentivize them to do just that, it announced it would buy back $1.5 billion worth of its own shares this year, which should push up the value of those left over. Consider them incentivized: Best Buy’s stock jumped 9%.

Why Should I Care?

The bigger picture: Keep those sales coming.
Those projects include an annual membership program – which offers things like unlimited tech support and special discounts – and Best Buy Health, which specializes in healthtech for older people. Best Buy could be onto something here: both avenues have the potential to be more reliable revenue streams for the retailer, reducing its reliance on much more seasonal product sales.

Zooming out: Kroger sticks to the plan.
Best Buy is a bit of an outlier among US retailers this earnings season. Just look at Kroger: hybrid working and the trend toward at-home cooking helped boost demand for the retailer’s groceries, pushing same-store revenue up a better-than-expected 4% (tweet this). And with more and more shoppers opting for home delivery and pick-up options, its digital sales were twice as high as they were before the pandemic too.

You might also like: Is Best Buy a worthwhile investment?

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Analyst Take

This Is A Turning Point For Clean Energy Stocks

Stéphane Renevier, Analyst

What’s Going On Here?

The Ukraine crisis has come as a painful reminder of how much Europe depends on Russia for its energy consumption.

Reducing that dependence, then, has just become one of the region’s most pressing objectives, with Germany just announcing bold plans to accelerate the transition to renewable energy.

And since plenty of other places are expected to follow suit, wind, solar, and other renewable energy stocks jumped after the attack.

But prices are still trading at 40% below their previous highs, which arguably sells short just how dramatic a catalyst this conflict could be.

So that’s today’s Insight: why this might be a turning point for energy stocks, and the one exchange-traded fund you could use to benefit.

Read or listen to the Insight here

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