Best Buy Rockets To All-Time High On First-Quarter Beat, Higher Guidance
Consumer electronics retailer Best Buy (BBY) on Thursday reported better-than-expected sales and earnings for its fiscal first quarter, shaking off concerns about the “retail apocalypse.” Richfield, Minn.-based Best Buy earned 60 cents a share excluding items, up 40% year over year, on sales of $8.53 billion, up 1%, for the quarter ended April 29.
Same store sales rose 1.6%, reversing a year-earlier decline of 0.1%. Analysts expected Best Buy to earn 40 cents a share on sales of $8.28 billion in fiscal Q1. Best Buy stock surged 18.5% to an all-time high of 59.73 in intraday trading on the stock market today. That eclipsed its previous record high of 59.50 from April 2006. In late morning trading, Best Buy was up 18%, near 59.50.
Best Buy Stock Rockets Higher After Blowout Quarter
Revenue and profit surged, and the retailer boosted its guidance for the full year.
What happened: Shares of consumer electronics retailer Best Buy (NYSE:BBY) soared on Thursday after the company handily beat analyst estimates for first-quarter revenue and earnings. The retailer also raised its guidance for the full year, leading investors to drive the stock up nearly 19% by 11:30 a.m. EDT.
So what: Best Buy reported revenue of $8.53 billion, up 1% year over year and $220 million higher than the average analyst estimate. Comparable sales grew by 1.6%, compared to a 0.1% decline during the prior-year period, driven in part by a 22.5% increase in domestic online sales.
Best Buy surprises everybody with a strong Q1; stock leaps
Best Buy Co. Inc. posted an unexpected sales gain in the first quarter, on the strength of new electronics and a boost from tax-return checks. Reuters has an early report on the numbers from the Richfield-based retailer, which posted adjusted earnings of 60 cents per share, well ahead of analyst estimates of 40 cents per share.
Shares of Best Buy (NYSE: $BBY) closed up more than 21 percent, to $61.28 in afternoon trading — which puts the stock in all-time high territory, according to The Wall Street Journal.
Today’s Trading Lesson…
Stopped Out: How being Disciplined Almost Ruined Me
Discipline is good, discipline is smart, discipline nearly drained my account. Get a plan! You need a trading plan! My trading plan was a recipe for getting stopped out of every trade. I guess this is what a punching bag feels like. I’m following the “rules,” but I’m still losing money.
My friend Bobby who was a NASDAQ market maker for First Boston gave me a clue.
He said “It’s trade management not trade predictions. Learn to work the order a little but be disciplined in your risk management. Never lose more than you planned, but don’t be stubborn with your entries or you’ll drive yourself crazy and get stopped out of every trade.
As long as the tape is obvious, work the order. My institutional clients scale in and scale out, learn to do the same “
Bar-by-bar I reviewed the trades. They all look good but I didn’t understand what Bobby meant by an obvious tape. At this point I wasn’t losing much money. I stopped the bleeding by doing less of the stupid stuff, but commissions, software fees and small losses slowly drained my account.
Discipline helped. But it wasn’t the answer. I became very disciplined at taking losses… Something was still missing. I needed a few big winners to pay for all those small losses.
Tape Reading the SPY ETF
$SPY price action closing in on a Saturation Point ahead of the long weekend.
This means you prepare a profit-taking game plan today. If the stock market trades higher into the close, the correct trade management today is selling into buying. After 5 solid days of “well-bid” price action, the probability becomes lower for follow through in the short-term.
Normally we would look to hold one more day, but as you can see on the chart, volume increased yesterday. This means shares changed hands from smart buyers to late buyers. To be clear, this trade call is for the most recent momentum. I see no reason for a bearish play right now other than oil and gas stocks.
The lesson? When volume increases after a sustained move, that typically signals the end of that move. If the stock market trades higher today, the smart play is to sell. The long-term game plan calls for the SPY ETF to pause at these new levels, and barring a bearish catalyst, to continue the grind higher.
If today gives us a bearish u-turn on higher volume, (trades higher but closes near the lows) I would not carry the long into the weekend. (unless you are a long term position trader and not trading for cash flow.)
Stock Market Today:
Stocks to Trade 5-26-17 | Friday Edition
Bullish Momentum: BBY, SNAP, UAL, CSX, AAL, CCI
Bearish Momentum: sm, srpt, hal, apa, clr, dvn, bhi, cop, nfx, slca, slb, alxn, trip, apc,
Long-Term Order Flow
Bullish Order Flow: NFLX, UAL, PM, UNH, AMT, EA, TSO, AMZN, FB, ADSK, ADBE, CAT, COST, AET, BABA, MAR, AVGO, AAPL, KMX, INCY, NVDA, AAOI
Bearish Order Flow: apa, clr, twlo, dvn, bhi, nfx, slca, trip, x, cof, dfs, lulu, fl, car, esrx, lly, amgn, akam, dks, tsco
2X Normal Volume: BBY, HAL, MOMO, SLB, GLYC, ALXN, DLTR
Inside Days: csco, t, teva, mrk, wba, nem, fslr, mcd, fast, esrx, utx, nue, grmn
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