Buy BBY Calls: Best Buy Delivers an Impressive Third Quarter

Our good fortunes this week continues today as the S&P 500 continues on the part to 2100 as it stays above 2050 for much of today’s session. We continue latching to this bullish momentum as we check out the options of Best Buy Co Inc. (NYSE:BBY). Best Buy is no stranger in the investment community as the company has positioned itself as an important retailer both online and brick and mortal stores.

Best Buy with its market capitalization of $12.23B  is a multinational, multichannel retailer of technology products, including tablets and computers, televisions, mobile phones, large and small appliances, entertainment products, digital imaging and related accessories.

The Company also offers technology services including technical support, repair and installation under the Geek Squad brand. The Company operates e-commerce operations, retail stores and call centers and conduct operations under a variety of names, such as Best Buy (BestBuy.com, BestBuy.ca), Best Buy Mobile, Five Star, Future Shop (FutureShop.ca), Geek Squad, Magnolia Audio Video and Pacific Sales.

Why I’m Interested in Best Buy Today

Shares of Best Buy are surging at an impressive rate today as the company was reporting a 5.29% gain to $37.42 per share as at 1.51PM after the stock has made a $38.69 intraday trading high. Interestingly shares of Best Buy are trading with a 52-week low of $22.15 and a 52-week high of $43.19. Hence, the shares of Best Buy are trading at a 74.67% premium to the 52-week low and at an 11.63% discount to the 52-week to suggest that they are closer to the 52-Week high than to the 52-Week low.

Why Shares of Best Buy Are Surging Today

The main reason shares of Best Buy are soaring today is the impressive third quarter (Q3 2015) earnings result that the company released today. Highlights of the earnings release are presented below.

Best Buy reported that its comparable store sales increased by 2.2% to beat the consensus analyst estimate of a 2% drop in comparable store sales

Net sales in the third quarter were up 0.5% on an annual basis to $9.38B to beat the consensus estimate of $9.1B

The company reported earnings of $107M or $0.32 per share from $0.12 per share last year to trash the consensus analysts’ estimate of $0.25 per share

Domestic revenue of $7.99 billion increased 2.3% versus last year primarily driven by comparable sales growth of 3.2% 

Why You Should be Bullish on Best Buy

Apart from the fact that traders and investors are happy with the impressive third quarter results that Best Buy posted, analysts are also optimistic about the outlook of the stock going forward.  For instance, the stock has a Zack’s rank of 1, which indicates a “Strong Buy” proposition.

How to Trade BBY Options

BBY Stock Chart

The chart above shows how the shares of Best Buy have traded in the last one year. You will observe that the stock took a massive plunge when the markets opened in January from a $36 trading price to a $26 trading price.

However, you will notice the bullish ascent that saw the stock rising to the current $37.25 trading price. The bullish momentum on the stock is just starting out and I strongly believe that shares of Best Buy have the potential to breakout above the 52-Week high. I recommend buying BBY calls and the BBY Jan 2015 38.000 call (BBY150117C00038000) looks attractive at an asking price of $1.78.

— Daily Option Alerts

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