What's The Market Saying About Best Buy? (BBY, VNO)

Shares of Best Buy BBY are slightly up today, gaining around 0.6%, but this is not indicative of the company's future.

Pali research analyst Stacy Widlitz is on CNBC talking about how Best Buy had a slam dunk opportunity to grab market share, and missed it. When Circuit City filed for bankruptcy, Best Buy benefited somewhat, but the company's earnings are the same before Circuit City closed up shop.

Software comps at the company are down 15%, and we're seeing a migration to shopping on line that isn't likely to change anytime soon.

Widlitz said that buying habits are changing. Amazon.com AMZN is taking away market share in consumer electronics, and has tripled its market share in LCD TV's over the past few years.

People were going to Best Buy to look and play with the product, then go home and buy it online. Now even that is slowing. People are still going to ask for advice, but not nearly as much as before.

Looking at the company's financials, the company is cheap here, trading at 9 times 2011 earnings, and around 8.6 times 2012 earnings. The company has a strong return on equity, just over 23%, but if the company is unable to change consumer's habits, it could be forced to close large amounts of stores, which some may see as a disaster, and a shorting opportunity. This could also be a shorting opportunity for some of Best Buy's major landlords, like Vornado Realty Trust VNO if indeed, stores do have to close.

The share price and the market seem to be saying "Best Buy, you better get your act together, or you're going to go the way of Circuit City."