Best Buy Boosted By Optimistic Outlook

Despite missing consensus expectations for its fourth quarter, Best Buy stock was up 10% by midday Thursday after the company expressed optimism about the revenue potential of its membership programs. The electronics retailer has been plagued by supply chain issues during the pandemic.

Despite more muted expectations over the short term, the company increased its quarterly dividend by 26% and said it plans for $1.5 billion in share buybacks in the next 12 months. 

Thirty-one million shares of Best Buy are held by 244 ETFs, with the newly launched Clockwise Capital Innovation ETF (CWC) offering the most exposure, with a 9.28% weight in the company. Actively managed CWC launched at the end of January and focuses on companies offering 5G internet and cloud-based products and services.  

The Acquirers Fund (ZIG), with roughly $44 million in assets under management, is a distant second in terms of exposure, with a weighting of 3.55% to the stock, followed by the $9.3 billion First Trust Rising Dividend Achievers ETF (RDVY), with a weight of 2.03% in Best Buy shares.  

Meanwhile, the $218 million Alpha Architect U.S. Quantitative Value ETF (QVAL) and the $20 million John Hancock Multifactor Consumer Discretionary ETF (JHMC) have weightings of 1.95% and 1.91%, respectively, in Best Buy.

The list of ETFs holding the most BBY shares is led by the $33.7 billion Schwab U.S. Dividend Equity ETF (SCHD), with 2.62 million shares, while the nearly $400 billion SPDR S&P 500 ETF Trust (SPY) holds 2.41 million shares. Combined, that’s 16% of the total shares held by U.S.-listed ETFs.

RDVY shows up again, holding 1.89 million shares, followed by the iShares Core S&P 500 ETF (IVV) with 1.87 million and the Vanguard Mid-Cap ETF (VO) with 1.68 million shares.

In terms of performance over the prior 30-day period, QVAL claims the top spot, with a 2.4% return, while the $23 million First Trust Total US Market AlphaDEX ETF (TUSA) was fairly close behind, with a return of 2.25%.

The Fidelity New Millennium ETF (FMIL), the Lyrical U.S. Value ETF (USVT) and the ProShares RAFI Long/Short ETF (RALS) were up 1.62%, 1.54% and 1.34%, respectively, during the same time period.

While it is clear there is a tilt toward dividend and value among the ETFs holding BBY, multifactor ETFs constitute the largest share, with 44 of those funds holding the stock.

Another 43 plain vanilla cap-weighted ETFs hold the stock, as do 35 actively managed ETFs. Twenty-nine ESG ETFs and 27 fundamental ETFs also have allocations to Best Buy.  

Contact Heather Bell at [email protected]