Tuesday, January 16, 2007

Is BEST BUY a Buy?

I bought some Best Buy stock back in August. Sold some September 50s calls and wouldn’t you know it, they got called away. (I made just a little over 5% not counting margin interest and commissions. Not bad for a month.) Since then I’ve kept an eye on it as it climbed to the upper-50s and thought oops. With it once again being back in the $49 range I am wondering if it is not time to take another poke at it. I have some margin that will be freeing up this weekend (January $45 calls of CROX being called away, I’m pretty sure.) Monday would be the first chance for me to buy some BBY. I kind of like that, forced time to think about it.

Best Buy reports earnings April 4th, they had a little trouble last time around. They have fallen from around $58 in October to below $49 today. S&P has a four star buy on them and a $63 one year target price. Since this buy would be on margin I am looking for a quick turn of 5% or so. Ideally I could turn it in less than a month, kind of like last time. The question I am still mulling over is whether to do covered calls again. Right now I am leaning toward playing this one straight up with no calls. There is probably more to be made here if I decided to hold longer but when it is on margin my thinking is, “just give me the money and I’ll get out of your way.” I’ll let you know next week. (This is me merely thinking out loud. Please do your own homework. Buy and sell what you think is best for your portfolio.)

Have an opinion on Best Buy or another stock I should be tracking? Drop me an e-mail or post a comment.

That’s it for today. Here’s to making a few dollars and to keeping an eye on your EveryDay Money.

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