CHICAGO, Jan. 22, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Best Buy Co., Inc. (NYSE:BBY-Free Report), Wal-Mart Stores Inc. (NYSE:WMT-Free Report), Sears Holdings Corp. (Nasdaq:SHLD-Free Report), Amazon.com Inc. (Nasdaq:AMZN-Free Report) and Waddell & Reed Financial, Inc. (NYSE:WDR-Free Report).

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Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Tuesday's Analyst Blog:

What's Happening with Best Buy?

Best Buy Co., Inc. (NYSE:BBY-Free Report) had made a remarkable turnaround in 2013 with the stock price increasing over four fold. However, 2014 began on a wrong note with the stock crashing 30% in a single day following dismal holiday sales data and the subsequent trimming of guidance, raising concerns over CEO Hubert Joly's ambitious restructuring strategy.

The company's sales fell 2.6% year over year to $11,451 million for the nine weeks ended Jan 4, 2014, while comparable store sales (comps) dropped 0.8% over the same time frame. As per segments, sales at the domestic segment dipped 1.5% to $9,754 million from the prior-year period while comps fell 0.9%. The International segment's sales waned 8.1% to $1,697 million but comps nudged up 0.1%.

The consumer electronics giant held that intense promotional war, which characterized the holiday season, had significantly impacted its margins and thus compelled a downward revision in its operating margin guidance. The company had cut down prices, at the expense of profits, to compete better with peers such as Wal-Mart Stores Inc. (NYSE:WMT-Free Report) and Sears Holdings Corp. (Nasdaq:SHLD-Free Report).

Best Buy now expects the operating margin to shrink 175-185 basis points (bps) year over year during fourth-quarter of fiscal 2014. Moreover, tight supply of key products, lower traffic and weakness in mobile phones category contributed to lower-than-expected sales.

The only silver lining was Best Buy's strong online performance amid heightened competition from online giants like Amazon.com Inc. (Nasdaq:AMZN-Free Report). Online sales at the domestic segment rose 23.5% versus 10% in the prior-year period (nine weeks ended Jan 5, 2013).

The rise of e-commerce could become a potentially catastrophic event for bricks-and-mortar retailers. Amazon has metamorphosed the way consumers used to shop, and the company's performance over this holiday season bears a testimony to it.

E-retailers have the biggest advantage of not maintaining any stores and as a result command a better pricing technique without denting margins. Bricks-and-mortar retailers falter on this ground as prices can be lowered only at the expense of margins as seen in this holiday season.

Additionally, the competition that Best Buy faces from the retail bellwether, Wal-Mart is a concern. This multinational retail corporation hosts practically everything under one roof, which leads to a highly effective pricing mechanism.

With changing retail techniques, Best Buy has also adopted varied tools to fit itself in the race of survival of the fittest. It has made significant progress in enhancing online sales, inventory management and supply chain execution. Moreover, the company extended its "buy online - ship from store" endeavors to more than 400 outlets.

Moreover, it has reduced an additional $45 million in costs annually, thereby bringing the total cost savings generated to $550 million.

Further, entering into fiscal 2015, CEO Joly has increased focus on the company's turnaround. To enhance Best Buy's performance, Joly stated the need for aggressive cost cuts, prioritization of online sales growth and improvement in multi-channel strategy. Joly was appointed the CEO in 2012. Since then, he has closed several non-core operations, reduced staff and simplified the organization structure to run the company more effectively and reinstate its former glory.

On the flip side, Joly's restructuring strategy that is seemingly on the right track, has failed to deliver the desired results as reflected in the dismal holiday sales. Hence, it is not easy to comprehend the situation at Best Buy at present until we get a clear picture.

Why Should You Buy Waddell & Reed?

Waddell & Reed Financial, Inc. (NYSE:WDR-Free Report) recorded a solid full-year return of 81.0%, driven by impressive organic growth, efficient capital deployment activities and a strong balance sheet. Hence, further adding its shares to your portfolio will not be a bad idea.

Why This Stance?

Waddell & Reed has an Earnings ESP of +2.44% and a Zacks Rank #1 (Strong Buy), which is the right combination to beat earnings in the upcoming release. The company is scheduled to release its fourth-quarter and full-year 2013 results on Feb 4, 2014. Notably, the company's third-quarter 2013 earnings outpaced the Zacks Consensus Estimate by 11.1%.

Additionally, over the last 30 days, the Zacks Consensus Estimate for 2013 advanced 2.1% to $2.86. Also, for 2014, it moved north 3.7% to $3.62 per share. Hence, Waddell & Reed currently holds a Zacks Rank #1 (Strong Buy).

Waddell & Reed has enhanced shareholder value through its efficient capital deployment activities. The recent 21% hike in its quarterly dividend helped it gain investors' confidence. Also, the company's share repurchase program seems encouraging.

Waddell & Reed's AUM improved at a CAGR of 12.68% (2000-2012), reflecting its consistently strong investment performance. We also expect a solid growth in AUM in 2013.

Further, being one of the oldest mutual fund and asset management companies in the U.S., Waddell & Reed has been striving hard to enhance fund performance through its competent and unique business model, upgraded technology and superior quality control measures.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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