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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