Why Best Buy is a Great Company

Image: BestBuy

Market Valuation:  $19 Billion 
 
Ironbound Buy-Side Valuation:  $15 Billion
 
Ironbound Assessment:  Minnesota based Best Buy Co., Inc., founded in 1966, is an American multinational consumer electronic retail chain.  Over the last 5 years the company has delivered over 10% return-on-assets, and over the last 10 years averaged 11% operating income as a percentage of assets.  As a result, our upside valuation is on the higher end at $25 Billion, equivalent to 10-times the average operating income reported over the most recent three years.  We like Best Buy because it reports a mission driven triple-bottom-linebusiness model in their 10K SEC filings.  In addition, the company boasts a clear north-star purpose: to enrich lives through technology.  Moreover, the company is determined to lead with a positive impact on society and the environment.  In 2022, Best Buy reported a 2030 goal to reduce carbon emissions by 75% and become carbon neutral by 2040.  Their environmental initiatives also include a 25% reduction in water consumption by 2025 with waste reductions from single-use-plastics as well as a transition to more sustainable alternatives.  As part of their long-term growth strategy, Best Buy has been making inroads into health technology to expand their health and fitness related products and services.  These stakeholder growth strategies should help revenues double to $100 Billion over the coming decade.