Finance

Market Information

Stock

1.Assessment of the markets where stocks are traded
The chart given below shows the market performance in the last five years. A thorough analysis of the chart makes it evident that the market was showing an upward trend during the FY 2006 and 2007 by remaining at 10, 000 points on an average with a volume of 2.5 billion being traded. The upward trend of the market continued and it touched its maximum of 14,000 points in the last quarter of FY 2007 with a volume traded of over 5 billion. However, from then onwards, the points displayed a mixed performance but the density of volume being traded kept rising and it reached its maximum of over 10 billion in the last quarter of FY 2008. During the same time period, the points performance kept declining and it reached its lowest in first quarter of FY 2009. However, the market was able to pull itself back and started showing an upward trend along with rising volumes from the second quarter of FY 2009 onwards. The market showed it sell point during the second half of the FY 2008 and showed buy point during the first quarter of FY 2009.

2.Returns and risks
The following table displays average return on the BBY stock for the last five years and for the sake convenience it also highlights average monthly returns during each financial year. After having analyzed this table, it becomes evident that the stock did not show a promising performance in FY 2005 because the return kept declining throughout the year from 25 in mid 2005 to being -9.86 by the end of the year. With the improving market, the stock also performed well during the beginning of FY 2006 , but could not keep up its performance the return declined to 17 by the mid of the FY 2006, and the year ended with -10 return. Unfortunately, the stocks returns could not do much till the third quarter of FY 2007. However, during the last quarter of 2007, the stock was able to provide decent returns and ended with 3 return. FY 2008 followed the route of FY 2007 in which the beginning year returns were negative and reached its highest low return in the last five years of -23 in November 2008. But surprisingly, the stock rose up and provided a return of 35 at year end. Keeping the market performance during the same time period in mind, it can be assumed that the stock was being traded in high volume and because of increased liquidity in the market, the return increased too. Moving on, FY 2009s first quarter ended with 31.7 return which was the highest achieved during the last five years. However, the stock again could not keep up the performance and the return kept declining or remained at very low levels. Again in FY 2010s third quarter the returns increased to 16. Another interesting aspect about analyzing the returns of the stock is that during March of all the years, the return averaged on to be 10.67 however during October the average returns declined to -3.26. In this regard, another aspect which is worth mentioning is that the price of the stock has been very volatile. It did not remain constant much, rather, kept changing quite rapidly during different months in the last five years. It is obvious that with negative returns, the risk of trading the security turned higher during time intervals.
Return Performance data BBY

ReturnsJanFebMarAprMayJunJulAugSepOctNovDecAvg.
Returns 0.82-2.1410.671.79-2.021.260.371.07-0.56-3.260.592.13Times BBY Stock Price Increased514562484852475853585555Times BBY Stock Price Unchanged010010010012Times BBY Stock Price Decreased4950485556565852495346482010 -7.11-0.4016.557.01-7.172009 -0.312.8631.711.11-8.54-4.5811.59-2.913.421.7612.18-7.862008 -7.44-11.73-3.593.768.53-15.180.3012.71-16.23-28.31-22.9435.732007 2.46-7.774.82-4.243.52-3.34-4.45-1.434.715.435.213.132006 16.516.323.841.31-6.453.47-17.313.6613.963.16-0.50-10.502005 25.9411.74-6.66-8.661.688.99-9.86

3.Volumes  closing Price
The following charts display the price and volume trend of BBY stock in the last five years. Taking a broader perspective, the closing price on an average moved between 34 to 50, however it touched its lowest at 17 in the last quarter of FY 2008. The volume traded of the stock can be broadly assumed to have remained between 12 to 24 million shares on an average. If each yearly price movement analysis is carried, it can be concluded that the stock price showed an upward trend during the FY 2006 and touched the highest price of 50 in the last quarter of the year. However, the price could not keep up with the trend and started declining. During same time period, the volume did show high points of trading by touching the extent of 36 million shares. But during this time interval, the liquidity of the stock does not seem to be as high as it got right from beginning of FY 2008 and continued being traded in high volume till the first quarter of FY 2009. An interesting point is that the price of the stock showed a declining trend during the same time period. The price decline can be attributed to investors losing confidence in investment and poor performance of the market during this period. The price volume analysis also makes it evident that the stock touched its sell points during first and last quarters of FY 2006 and the last quarter of FY 2008. It is also vital to mention that the stock price showed a bearish trend with decrease in price but increase in volume traded during the FY 2008 and FY2009.  Last but not the least the trend analysis of price and volume for BBY stocks highlights the fact that the stock has high correlation with the market because markets performance did get reflected in the stocks performance during similar time periods.

4.Dividend policy
The dividend policy of the company gets displayed in the table in part 5, which shows that Best Buys shareholders get constant increasing cash dividends. The dividend policy requires the management to pay cash dividends quarterly. But at the same time they also mention it in their dividend policy that the future dividend payments would certainly depend upon earnings, capital requirements, financials conditions or some other factors that the board would deem relevant (Annual report, 2009). Moreover, the company is also in practice of stock repurchase from open market at different time intervals. However, before repurchasing their stocks, they take into account their cash needs, availability of funding and market price of their stock (Annual report, 2009).

5. Dividend History
The following chart shows the dividend history of BBY in the last five years. The analysis of this table highlights the fact that the company has paid dividends to its stockholders in each quarter right from FY 2006 till FY 2010. The impressive element is that with each passing year the dividendshare has been increasing. The management has been able to bring about25 in dividendsshare from the FY 2006 to FY2007. This trend continued with an increase by 30 and 7 in the FY 2008 and 2009 respectively. At this point, it should be mentioned that with declining stock market performance and increasing global recession, the companys ability to pay dividends each quarter is commendable and shows their dedication for keeping their stockholders satisfied.
Year Dividend History

PayableAmountShareEx-DateRecordDeclaration050620100.14041320100415201003272010012620100.14123120090105201012172009102720090.14100220091006200909172009072820090.14070220090707200906182009050720090.14041420090416200903282009012720090.14010220090106200912182008102820080.14100320081007200806262008072920080.13070320080708200806192008051420080.13042120080423200804042008013020080.13010720080109200812202007103020070.13100420071009200706282007073120070.10070620070710200706212007051620070.10042320070425200704062007012320070.10122820060102200712142006102420060.10092920061003200606222006072520060.08062920060703200606162006051120060.08041820060420200604012006012420060.08122920050103200612152005102520050.08093020051004200506242005072620050.07333063020050705200506162005120920030.20111420031118200310222003

5.Stock splits
The company has had no stock splits in the last five years. The last one they had was in FY 2005 (BestBuy.com)  

B. Other securities

Best Buy issues common stocks, preferred stocks and convertible debentures in the market for financing needs.