IBJNews

HHGregg growing too fast?

Back to TopCommentsE-mailPrintBookmark and Share
On The Beat Industry News In Brief

The fast-growing locally based electronics retailer HHGregg Inc. has seen its stock price rocket more than 80 percent this year as it moves to take advantage of the bankruptcy liquidation of rival Circuit City.

A columnist is pointing out pitfalls of HHGregg’s rapid expansion. (IBJ File Photo)


But a columnist for Barron’s argues in a recent feature that the shares have risen too far, too fast. The article points out that HHGregg is expanding in markets that already have several retail competitors, and its existing stores are concentrated in areas with high unemployment. It also expresses concern about the high level—one-third—of purchases that customers put on HHGregg credit cards.

Shares in the company traded recently at $19. If they dropped to the same price-to-earnings multiple as those of Minnesota-based Best Buy Co., Barron’s points out, the shares would drop by about a third, to $12.50.

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
ADVERTISEMENT