Best Buy Co., Inc. (BBY) remains the largest electronic retailer in the world, but it’s losing ground to Amazon.com, Inc. (AMZN). According to a note written by Deutsche Bank hardline retail analyst Mike Baker back in 2010, Best Buy’s electronics market share stood at 25.6% versus Amazon’s 6.3%. Today, Best Buy’s electronics market share has been reduced to 22.7% versus Amazon’s 17%. Amazon has also surpassed Wal-Mart Stores Inc. (WMT) for the number two spot on the list.

Best Buy has attempted to at least maintain share by making investments in systems, infrastructure, distribution and price. However, Best Buy has seen no market share gains in electronics since 2009. Nor has Apple Inc. (AAPL). To give you an idea of Amazon’s reach, electronic sales growth in 2015 totaled $6.5 billion. Amazon’s contribution was $5.1 billion. That’s 90% of the market. The only other company gaining market share in electronics is Costco Wholesale Corporation (COST). (For more, see: Amazon Attacks Apple, Pandora With Streaming Music.)

Amazon’s business expands well beyond electronics. Market share gains (or losses) in any area can indicate wise or poor management decisions. Let’s see if these market share moves relate to stock performance. In addition to one year performance, the chart below includes dividend yield, debt-to-equity ratio, operational cash flow (trailing 12 months) and short interest.

 

1 Year Stock Performance

Dividend Yield

D/E Ratio

OCF

Short Interest

AMZN

62.24%

N/A

1.19

$11.26 billion

1.33%

BBY

-8.24%

3.58%

0.31

$1.82 billion

12.88%

WMT

-0.83%

2.70%

0.65

$29.14 billion

2.61%

AAPL

-22.47%

2.35%

0.61

$67.53 billion

1.14%

COST

15.42%

1.08%

0.44

$4.49 billion

2.28%

Is this coincidence or correlation between market share and stock performance? Probably the latter. It might not be a direct correlation, but it relates to management efficiency. (For more, see: Amazon Prime Creates a Captive Audience.)​

Dan Moskowitz does not have any positions in the stocks mentioned in this article. 

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