Best Buy a buy for long-term investors: Barron's

NEW YORK (Reuters) - Shares of Best Buy Co (BBY.N: Quote, Profile, Research), the largest U.S. consumer electronics retailer, look especially attractive for long-term investors, given expectations for increasing consumer appetites for video games, DVDs and televisions, Barron's said in its March 24 edition.

Shares of the Richfield, Minnesota-based company closed Thursday at $42.41, down 21 percent from their 52-week high set in December.

But Barron's said the shares are trading at about 12.5 times estimated fiscal 2009 earnings, below the normal 15 to 18 multiple, and about 6 times estimated 2009 cash flow per share, compared with a normal nine times cash flow.

Best Buy on February 15 trimmed its full-year profit forecast to a range of $3.05 to $3.10 per share from a range of $3.10 to $3.20. Yet Barron's said several factors warrant optimism.

It said Best Buy should benefit from increased sales of higher-margin software for Sony Corp's (SNE.N: Quote, Profile, Research) (6758.T: Quote, Profile, Research) PlayStation 3, Nintendo Co's (7974.OS: Quote, Profile, Research) Wii and Microsoft Corp's (MSFT.O: Quote, Profile, Research) Xbox 360.

The company should also benefit from the end of a format war over next-generation DVDs, where Sony's Blu-ray format won over Toshiba Corp's (6502.T: Quote, Profile, Research) HD DVD, Barron's said.

In addition, Barron's said Best Buy will see sales tied to a government-mandated conversion to a digital television standard next February.

Households without cable or satellite hook-ups will have to either buy digital televisions to keep receiving free over-the-air transmissions or buy converter boxes, Barron's said.

(Reporting by Jonathan Stempel, editing by Richard Chang)