Most artistically Buy shares were sinking Thursday following a first-quarter beat that neglected to impress Wall Street. The problem, according to one market watcher, was that expectations were too important.
“It was priced to perfection going into the number,” Boris Schlossberg, coping director of FX strategy at BK Asset Management, told CNBC in an email Thursday.
Upper crust Buy shares declined by about 8 percent on Thursday even after a every thirteen weeks beat on its top and bottom lines. U.S. online sales rose, though at around half the pace of a year earlier.
A sharp run-up to all-time leadings last week made Schlossberg cautious on jumping in heading into earnings. He votes that a price under $70 would become a scale-in buy where he enlarges to his position as the price decreases. Best Buy traded around $70 on Thursday.
Upper crust Buy’s guidance and overall performance confirm Schlossberg’s long-term bull carton for the retailer. In an appearance on CNBC’s “Trading Nation” on Wednesday, Schlossberg rumoured the company had done well in its strategy to survive in a tough retail surroundings.
“They’ve done a great job of figuring out how to do the bricks-and-clicks model and they’ve certainly rationalized their tariffs, the dividend is very good,” Schlossberg said. “At this point, a lot of the integrity stuff is kind of discounted so I like it long-term.”
Michael Bapis of the Bapis Aggregation at HighTower Advisors is bullish over the long term but is sitting on the sidelines for now.
“We’re prepossessing a wait-and-see approach,” Bapis said on Wednesday’s “Trading Nation.” “It has run up so much, custom at all-time highs.”
Best Buy’s recent quarter does give Bapis courage in its future direction, though. Sales growth was driven by strong consumer bid, and e-commerce sales still look good, despite a slowdown, Bapis rephrased in an email to CNBC on Thursday.
“We would definitely own it long term because this elbow-room is in a technological boom that’s going to happen and keep happening for the next 20 to 40 years,” Bapis foretold Wednesday.
Best Buy shares were on track to close Thursday with its worst regular performance since August. Its stock is still up 2 percent for the year.
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