Circuit City Stores
Research
Report
Justin
Howell
11/1/99
Circuit City is an extremely good company with solid
numbers. The company is a retailer
of brand-name consumer electronics and major appliances and a leading retailer
of personal computers and music software. Some
of the products offered by Circuit City include video equipment, televisions,
digital satellite systems, video cassette recorders and camcorders, audio
equipment, including home stereo systems, compact disc players, tape recorders
and player, car stereo systems, personal computers and more.
Some of Circuit City’s competitors include Best Buy, Tandy which owns
Radio Shack, and Sears.
The numbers for Circuit City look really good for the next few years.
The recent price was $42.50 a share and the P.E. ratio is 39.9.
Also the company beat earnings expectations last quarter and many people
see the potential for Circuit City to beat Wall Street Expectations often. EPS Growth is projected at a rate of 20% over the next five
years, which isn’t bad but I personally think it is pretty low.
Demand for the products that Circuit City sells such as Personal
Computers, DVD Players, and digital satellite systems should increase
dramatically in the next few years as older products such as VCR’s, cable T.V.,
and other older products become obsolete. That
is why a see a strong future for the industry as a whole.
The company Circuit City has a lot of strengths
without a distinct weakness. It is
a well managed company in a thriving industry.
The numbers for the company are extremely solid and there is a bright
future ahead. Also the company sells a lot of the home entertainment and communication products that are going
to lead us in to the future. Zack’s Investment Research, the source I used
rates Circuit City as a strong buy and I would have to agree with that
assessment. The stock is 10$ off
it’s 52 week high and it could easily surpass this high in the next few
months. Also I like the stock for
the short term because of the Holiday Season.
Circuit City posts it largest EPS during the fourth quarter of the fiscal
year and I see a possibility for the stock to once again beat analyst EPS
estimates. This would probably lead
to a significant jump in the stock’s price.
The only possible sell trigger I could see for this company would be if
it did not meet earnings expectations, especially during the Holiday Season.
I personally own this stock and I think that we should seriously consider
adding it to our portfolio.
Price = 42.50
P.E. Ratio = 39.9
EPS Growth Rate = 20%
52 week High = 52$
Dividend = .07
Beta = 1.45