CHICAGO, April 18, 2011 /PRNewswire/ -- Zacks.com
announces the list of stocks featured in the Analyst Blog. Every
day the Zacks Equity Research analysts discuss the latest news and
events impacting stocks and the financial markets. Stocks recently
featured in the blog include: Best Buy Co. Inc. (NYSE: BBY),
Wal-Mart Stores Inc. (NYSE: WMT), Amazon.com Inc.
(Nasdaq: AMZN), Verizon Communications Inc. (NYSE: VZ) and
General Growth Properties Inc. (NYSE: GGP).
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Here are highlights from Friday's Analyst Blog:
Best Buy's Altered Game Plan
As per Business Journal Report, Best Buy Co. Inc. (NYSE:
BBY) intends to employ a strategy of concentrating more on its
smaller mobile stores, online sales and expansion in China with less and less reliance on big-box
stores.
The company targets cost saves of $70
million to $80 million through the strategy and estimates a
reduction in square footage at its U.S. big-box stores by 10% in
three to five years down the line.
Best Buy expects to put up for sale 10 million connections in
fiscal 2012, mainly at the mobile stores. The connections are
related to mobile phone, home broadband, mobile broadband and video
service units. The company expects to have 600 to 800 Best Buy
Mobile stand-alone stores by 2016 and 325 of the smaller stores by
February 2012.
The change in focus would shift the company's key competitors
from Wal-Mart Stores Inc. (NYSE: WMT) and Amazon.com
Inc. (Nasdaq: AMZN) in niches like flat-screen televisions and
computers to Gamespot and Verizon Communications Inc. (NYSE:
VZ) over mobile/gaming.
As for China, the company hopes
to double its sales there to about $4
billion, over the next five years. The sales target is
expected to be met by increasing the number of well-performing Five
Star stores from 400 to 500. By the end of this fiscal year, the
Five Star store count is expected to hit 210. Five Star
incidentally is a chain that the company brought to China half a decade ago and is performing
better than its flagship stores there.
Best Buy Company is a multinational specialty retailer of
consumer electronics, home office products, entertainment software,
appliances and related services. The company operates retail stores
and websites under the brand name Best Buy.
Global sourcing is also an essential element of Best Buy's
business strategy, whereby the company comes in direct contact with
the manufacturers. This, in turn, drives gross profit margin by
lowering product cost and achieving product sourcing efficiency.
The company operates a global sourcing office in Shanghai, China.
Best Buy shares maintain a Zacks #3 Rank, which translates into
a short-term Hold rating. Our long-term recommendation on the stock
remains Neutral.
General Growth Refinances Malls
General Growth Properties Inc. (NYSE: GGP), a real estate
investment trust (REIT) that owns shopping malls in the U.S., has
recently refinanced $1.7 billion
worth of mortgage loans collateralized by 7 shopping malls. At the
same time, the company also increased the borrowing capacity under
its credit facility from $720 million to
$750 million. The strategic moves were aimed at increasing
its liquidity, which presently has swelled to over $2 billion.
With the refinancing transactions, General Growth has lowered
its interest burden on the new mortgage loans, which bears a
weighted average interest rate of 5.33% compared to 5.65% in the
erstwhile loans. In addition, the new loans have a weighted average
term of 10.3 years – approximately 7 years over that of the
in-place financing.
Besides reducing interest and lengthening the debt maturity
period, the new mortgage loans also generated cash proceeds of
approximately $400 million in excess
of the in-place financing.
Earlier in April 2009, General
Growth had voluntarily sought relief under Chapter 11 of the U.S.
Bankruptcy Code to reduce and restructure its debts. During the
bankruptcy proceedings, the company continued all its day-to-day
operations in all the shopping centers and other properties, while
exploring strategic alternatives for available sources of capital
to emerge from bankruptcy as quickly as possible.
General Growth emerged from bankruptcy in November 2010. The company currently owns and
manages a portfolio of 169 regional and super regional shopping
malls in 43 states. The aggregate portfolio amounts to 174 million
square feet of retail space.
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