After taking the holiday shopping season off, Goldman Sachs is reinitiating coverage of Best Buy (NYS: BBY) this week.

Goldman Sachs analyst Matthew Fassler is offering up a neutral rating on the beleaguered consumer electronics retailer, though a lot of the points raised seem to suggest a more bearish stance.

  • U.S. government data show that consumer electronics sales are lagging most of the other consumer segments.
  • Best Buy may not only be in the wrong place, but it may also be doing it wrong. Internet sales continue to eat Best Buy's lunch as showrooming -- where window shoppers of local chains see what they want before buying it cheaper online -- shows no signs of going away.
  • Fassler sees negative sales growth for the industry and expects Best Buy to post negative comps this year.
  • The boom in tablet sales may offset his projected 7% drop in PC sales, but margins will suffer.

If this is a neutral argument, one can only wonder what would make an analyst outright bearish!

It's easy to feel skittish when it comes to Best Buy. It may have outlasted Circuit City, but it has not overcome the problems that did Circuit City in. Consumers continue to gravitate to online stores. Best Buy's pricing is out of whack. Shoppers don't want to get hounded about a zillion different insurance and protection plans that are high-margin endeavors for Best Buy.

Best Buy reports next week. Shareholders must be freaking out.

This was probably not a good holiday quarter for Best Buy. RadioShack (NYS: RSH) slammed shareholders earlier this year in revealing that traditional non-mobile consumer electronics fell a sharp 30% during the holiday quarter. Best Buy obviously isn't boxed into the same small-box model, but it's not as if consumers are jumping all over flat-screen televisions when they know that prices continue to go lower.

When you factor in the market's disappointment with Best Buy's previous report and the way it dropped the ball with many holiday pre-orders, there's little reason to get excited here.

Amazon.com (NAS: AMZN) continues to gain market share at Best Buy's expense. The leading online retailer posted a 35% pop in sales during its fourth quarter -- and the market wasn't impressed. Best Buy operates on a different fiscal calendar, but how do you think the market will react when it spits out the 6% in top-line growth -- and 9% earnings growth -- that analysts are projecting?

Obviously, this is the kind of meandering that's already baked into the share price, but just remember that Best Buy fell woefully short on the bottom line in its two previous quarters.

This trend is definitely not your friend.

Best Buy is not a good buy
I entered a bearish CAPScall on Best Buy in Motley Fool CAPS three months ago. The call is beating the market so far -- because Best Buy is not. If you want to play nice with the trends that will pay off in the future, forget Best Buy and begin reading up on the stocks that smart investors are buying. It's a free report, but it will only be available for a limited time, so check it out now.

At the time this article was published The Motley Fool owns shares of Best Buy, Amazon.com, and RadioShack. Motley Fool newsletter services have recommended buying shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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